Looking for silver lining amid Covid gloom

Historian

There is an opportunity in every disaster, if only we know how to use it. The corona- virus, despite the panic of looming recession, may well turn out to be an opportunity for the Indian economy even though there are many who are pessimistic about India being able to use this chance. Countries and businesses alike do not like to put all their eggs in one basket. With the Covid-19 epidemic having shown the dangers of overdependence on Chinese producers, Indian manufacturers have a fighting chance once again.

This would be the fourth time in the past 100 years that India has got such an opportunity. The first two opportunities happened during the First and the Second World Wars when the European production systems stressed out because of their focus on the war effort. The third happened in the 1990s when the Indian computer programmers discovered that they and they alone were best placed to deal with the Y2K threat. We did not fully use the first two; the third boosted Indians to being masters of the computer programming world and if we do the right thing today, India may well be on its way to becoming an economic superpower.

During the First World War, the Indian manufacturing grew dramatically. Employment opportunities increased, wages increased and the balance of trade shifted in India’s favour. Basically, all that had happened was that while the European industrial powers tried to wipe each other out, Indian manufacturers got a chance to step in to fill the gaps that occurred in the economy. Japan and the US, too, grew as their industries began to supply goods to war-torn Europe and filled the opportunities to supply to their own local markets.

However, Indian businesses could not grow as much as the Americans or the Japanese because, as economic historian Tirthankar Roy points out, India had not systematised its credit systems and money markets. Indian growth was hindered because of poor systems of financing businesses. Even though India in 1914 had one of the largest reserves of gold in the world, it was held in private hands and was unavailable for industrial investment, much like the situation today. Our own research indicates that India also lacked in trained manpower which might make use of the newer high-tech systems of manufacture that marked the growth of manufacturing in both America and Japan. The Indian leather industry, for example, simply did not have access to capital, or machines, to convert raw hides into leather products for war. Consequently, India emerged as one of the largest exporters of raw hide in the world but missed out on the chance to become the largest producer of shoes, belts and other leather goods. That niche was filled by the Czech, Tomas Bata, and the Bata Shoe Company became a household name.

The same story of missing out because of poor systems of credit and financing happened during the Second World War, after which America emerged as the manufacturing hub of the world. However, unbeknown to most observers, this was the time when America also transformed itself into the knowledge hub of the world. Since then, the unbridled search for knowledge has been the key to American growth. However, an interesting misstep in the American story provided India with the third opportunity to grow. This was in the world of computer programming.

In the 1990s, the western world, now substantially computerised, got scared that its computers would not be able to transit to the new millennium safely. This was the scare of the year 2000, the Y2K. As it turned out, Indians, and Indians alone, at this time, were conversant with the legacy of programming languages which controlled the financial world and its lingua franca, English. It also helped that the Government of India did not make any effort to help Indian computer programmers and was indifferent to the services that Indian programmers began providing to the West.

Today, India has changed considerably and is well placed to make good use of the opportunity, but for one serious lacuna. Much of the infrastructure for growth is already in place: thanks to the one-nation Goods and Services Tax, great strides have been taken towards digitalisation and systematisation of the banking and credit systems. The government, too, has given up on its socialistic dream of controlling everything and is willing to allow people to take charge of their own activities.

However, the abilities of our humungous academic manpower need to be roped in for this growth. Our existing system of higher education may turn out to be our weakest point today. Currently, in our system of higher education, we only transact knowledge which is either created in the West or is in response to the concerns of the West. The concerns of our businesses and industries have not found any space in our system of higher education. Even the ills of our society do not seem to be of interest to those in higher education, except to point out that there is a problem. Solutions to problems are not something which our system of higher education finds of any interest. A critique of this and that and everything in between has become an end in itself for the researchers in our universities. This state of affairs needs to be changed quickly. And the way to do that is to allow the researchers in our universities to actively engage with life outside of the campus and ask them to provide real-time solutions to real-time issues.

As it happens, businesses across the world depend on governments to make long-term investments in research and in generating manpower with higher order. Higher order skills involve the ability to learn; proficiency in dealing with computers, numbers and other necessities of the contemporary world; and proficiency in making sense of the written word and oral speech. Creating these abilities and skills is essentially the task of the government and society and not that of the business world. It is the lack of a robust learning and research culture which is missing from India today.

Academics continue to fritter away valuable time on curiosity-based research, either on arcane topics, or worse, on research agendas driven by western universities. Both economy and society lose as a result. So intricate is the inter-linkage between knowledge institutions and the economy in general that it is all too easy to lose sight of it. Today, we rarely remember that it was an attempt to reverse-engineer the academic citation system— who clicks the most number of links to reach any specific website or, in other words, who gets the most citations — in Yale University that created Google.

For that kind of experimentation and innovation to happen, what universities need are research fellows in large numbers and research projects that employ such fellows.