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. 

Some time ago, I wrote a blog about the damaging effects of rules and regulations made under certain compulsions thoughtlessly and ignorantly.

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?

Would you like to share your views? 

Halfhearted Privatization in India: Making a Nation Stoop in Shame!

In a democratic country, if major policy changes are to be implemented it has to be done in such a way that it would stand vindicated before the people and before the accepted principles of justice. 

After independence for nearly over forty decades, India's political arena was more or less stable with one major political party determining its fate. The views taken by the leaders of this party in those days were to have India progress in a quasi socialistic pattern where the government was responsible for major economic stability and growth.

All key economic activities in production and services during those days were almost the sole responsibility of the government. There was no field of activity where the central and state governments were not involved. Education was almost fully government owned and it was offered almost free. The fees, even when levied were very negligible and affordable.

For example, I paid no fee for my entire education up to a post graduation in engineering as a general category student.

Personal income tax was not a major contributor to the government income. The Indian government also fought many wars during those days with its neighboring states. Yet all these used to be managed within the government's income. Of course, the government used to borrow a lot, both from the public and from other sources. Huge budget deficit used to be a common feature.

Then came the era of the minority governments and the governments directed by nominated economic wizards. The political leaders apparently lacked the wisdom of complex economics. They were guided by scores of economic wizards drawn from the so-called top intellectual circuits.  It was further fueled by some politico-economic groups of the West led by the UK and others. These groups pushed the globalization agenda to all nations to follow under what was called the General Agreement on Trade and Tariffs or GATT.

The time was approaching for the so-called hard core socialists known as the communists too to accept the benefits of capitalism. Communist nations led by the erstwhile USSR began to collapse under pressures of globalization and privatization ideologies. Even hardcore communist China too diluted its policies and adopted capitalism under name sake communist leadership.

In India, as in the case with other nations, the professional politicians were failing to understand the complex nature of the international economic scene. They were forced to sign agreements drafted by international pressure groups, ably aided by a bureaucracy without having much competency  to understand the intricacies of the rules that would emerge in the near future.

The media and media professionals played the drums for these transition. Perhaps they did not have anything much to lose. They simply aimed for spicy news that either scared or titillate the literate public.

For the Indian governmental leadership, the stakes were too appealing to be ignored. They wanted to privatize India at the earliest. Some economic media men projected the great resources that India government would accrue when they sell the hitherto held shares of its public undertakings. They urged and supported the government to sell and divest

But the government did not have the much needed democratic majority. The political opposition was making hue and cries. Unfortunately, in the democratic politics, those in this profession some how consider opposition as opposing everything irrespective of it being good or bad. Many times the governments took shelter in the opposition views as an excuse for not making effective laws or implementing laws effectively even when they are passed. Many times the executive considered law abiding a problem area.

So the need for going in for halfhearted privatization without much transparency. 

Nearly two decades have passed now. India is still a mixed economy. To some extent a worst kind of mixed economy. You cannot make any rational laws without hurting any one, now. You cannot proceed without any one yelling a foul. Too many contradictory policies. Too many chances for arbitration. Too many opportunities for courts and law enforcement agencies to jump in. 

Where are we moving? It is sheer common sense to realize that you would make yourself shear apart if you stood on two vehicles moving at different paces.  Could your economy move forward on two different strategies or policies ? It is bound to shatter. It would take time for us to realize it. When a huge ship sinks, a good majority are perished. But some would also survive!

Now the governments of India have shed their responsibilities of giving affordable education or health care to its citizens. Affordable power or fuel are also not coming under their responsibility. Government is also out from giving any social security to its people. Nothing is done free of cost any more. Every thing is chargeable. That too dearly.

IITs and IIMs take millions now in fees, while they maintain the same old facilities or nothing much improved. Their teachers and faculty have not got comparable pay hikes as they had hiked the fees. Neither are there any assurance of these bright students getting any opportunities to use their skills and training for the benefit of their nation. Forget those who are picked up by the multinationals and eventually converted as non-Indians!

Incidentally, I met the father of a bright young management graduate from one of the reputed IIMs today. She together with another four from her institute was recruited by a South Indian company offering a pay pack of over a million rupees per year. That was through the campus selection process. Once inside, the company refused to pay them or give them any proper pay slips. The company was one among the few such fronts used by a clever Indian for doing dishonest business. His recruitment from the IIM again was just a show business. The girl and her classmates somehow managed to get out in a few months of 'captivity' in this company and its unscrupulous promoter. But what is surprising is the disturbing fact that the IIMs do not have any idea or research data regarding the companies and others who come to recruit from their campuses! The employment situation is not so rosy in emerging India now that it is not easy even for the IITians or the IIMans to get a decent job. Forget those millions who pass out as engineers and managers by paying hefty fees to fill the coffers of many family run 'educational and charitable societies'! There is no reliable data on this count in India. How could any one publish such disturbing information? What would happen to the education business that flourished in a clandestine manner in India post privatization if such information is known to the public ?

The uncertainties of economic policies and their lack of transparency in India have made several Indians to become overnight billionaires. Uncertainties and confusions are best suited for some to make a killing!

But what about those who do not have such a mind set? None can assume that all Indians are like that!

India is fast changing into a land of unscrupulous vested interests. Thing are okay so long as no one raises any voice of concern.

It is easy to govern a large country of divided  and ignorant people in the guise of democracy. But how long?

Is it the India that we are going to give to our children?

I am not against privatization. But halfhearted privatization is another thing. If the policy of the government is for privatization let it be that way. But then what is the responsibility of the government? Let them concentrate only on providing a level playing field in a justifiable and transparent manner to all. Let the public interest be the prime concern for the government when they make policies. Let them not make policies for making high profits and income alone just as a greedy private businessman. Let them concentrate on areas where private players are not able to start any sustainable activity and provide those with the necessary support. Let them make policies that are not changed every now and then. Let those in governance act like sane drivers and not as drunken drivers!

Whatever it is, we are going to be doomed when our fates are determined by dishonest public servants, whether they come through politics or through public selection processes .

It is high time that we put this country back on  the right tracks! Every citizen of this country with some right thinking mind should be concerned with it.

Would there be a day in the near future when India and Indians are not required to be ashamed of what they are !