Tuesday, October 7, 2014

Why It is Difficult for Government Institutions in a Democracy to Become Pioneers in New Technologies?

A couple of days ago, two senior level executives from a new foreign equipment manufacturer visited me. Their purpose was to introduce a few of the latest innovative process plant equipment that their company has successfully designed in the recent years. A few companies in the world who are keen to take advantage of modern innovations have already installed those in their factories and are taking advantage of those equipment.

As a matter of every day life for those involved with the engineering and technology business, this is nothing very unique. As for every business, there are consumers and suppliers in the engineering and technology business as well.

Engineers working in engineering and technology oriented line of business may have to work as a supplier or a consumer either at the same time or at different occasions.

Inside an Indian Public Manufacturing Facility-It is Too
Difficult for New Technologies To Be Adopted Quickly!

Researching, designing and commercializing new innovative machines, equipment and systems are the core business for some. Taking advantage of those new innovations for improving their own business activity is equally important for some others.

Humans of the advanced type are inherently innovative. They take advantage of the opportunities and innovate. In business innovations are dynamic process and is an essential requisite for existence. Those who fail to innovate perish or go out of business after some time.

Unfortunately all humans are not intellectually equal. All are at varying abilities at any given time as of now. Hence, there is the danger of the intellectually higher order humans keeping their lower order cousins perpetually under their command and disposal. Remember, in the olden days, the physically stronger ones had been doing exactly the same.

Higher ability does not necessarily mean that they are also higher in their spiritual qualities such as love, compassion, justice and character. Thus, there is a potential danger of the characterless but cleverer types keeping the inferior types always at a disadvantage.

Present day democracy is in its nascent state of development. But it came in to existence after testing all other forms of government in the past. Though it is not perfect as of now, it is undoubtedly the best form of government that humans can have.

Democracy gives some powers to the majority of those intellectually inferior humans to checkmate the potential onslaught of the superior minorities among their lot.

Thus, all democratic governments  try to ensure a leveled playing ground for all players in all human activities, including business.

Monopolistic and restrictive trade practices are not encouraged as a result of this. 

Are you wondering why I have written all these?

I shall try to clarify it now. Suppose that some superior humans invented some new technology which is beneficial to others in several ways. This benefit is likely to cause a high demand for this new technology. The group who pioneered this could now exploit this situation fully to their advantage. They can monopolize it and charge a high premium from the users which would enhance their returns several times their legitimate cost of developing this technology.

Had they been people with human values, perhaps they would not have done so. But, as of now, we have more number of clever characterless people than intelligent humanists.

Thus democratic governments and governmental institutions adopt the widely accepted practice of tendering for acquiring any types of goods or services. Justified practices which give equal opportunity to all stakeholders are kept as the ideal. All these processes are subjected to various kinds of checks and audits for finding and preventing violations.

Inducements of various kinds are often practiced and tried by some unscrupulous players to circumvent the rules of tendering and get undue advantages. As the time passes, more and more information on the types of inducements are gained by others which results in more and more rules and regulations in the public tendering processes.

As a result of this, over the time, public procurement procedures by the tendering process become very complex to such a situation that it is no more easy for government institutions to procure some thing for public benefit in the right time and in the right manner.

Now let me come back to the case of the two business executives about whom I told in the beginning. No, doubt, their company has a technology which is unique and very useful for my organization. Perhaps, my organization, which is a governmental one, could benefit both directly and indirectly if this technology is implemented. There are tangible and intangible benefits.

But perhaps, going by the rules and regulations which have matured over the years, it would be extremely difficult for my organization to make use of this new innovation. The reason for this is because the new technology is almost unique that we may designate it as 'proprietary'. A proprietary technology or equipment has no competitors and any attempt to procure such things by any governmental organization can cause doubts and suspicions on any body who tries to favor it. Due to this, many public servants who are responsible for public procurement shy away from taking decisions that involve proprietary technology or systems or equipment. It is not that we do not have some solutions to this kind of a problem. It does exist. But regrettably, the rule book solutions are mostly impractical as of now.

Some three decades ago, when I was a young engineer, such a thing was not so difficult. We had more freedom to take decisions in favor of our organization. But the scams and unscrupulous acts of others have caused problems for those who are not of that kind as well. Perhaps the overall benefit to the organization stands more or less similar then and now, though for different reasons. Then it was due to the offsetting effect of bad acts of some over the good acts of some. Now it is the effect of the complexity of rules and regulations tying the hands the good people to take beneficial decisions for the overall benefit of the organization while the bad ones keep doing damaging acts either clandestinely or due to ignorance. 


The situation is similar in the case of public procurement procedures as it stands now. Unfortunately, we have a severe shortage of experienced people with all round expertise to draft rules and regulations which are both effective as well as simple.

This kind of a situation is not unique to any one nation or society. It is more or less the same everywhere, where democracy has taken roots.

Perhaps, we may have to wait till our individuals mature as wise citizens for matured nations to evolve. Till such time, we may have to live with such problems in varying degrees!

Is privatization a solution to this?

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