Saturday, April 07, 2007

A force for change sparks innovation in India

March 3, 2007, 7:26PM
A force for change sparks innovation in India

Professor pushes entrepreneurial thinking to create hope in rural areas

ALAN T. SARACEVIC
San Francisco Chronicle


CHENNAI, INDIA — Tucked away on a leafy college campus in this booming
city of 7 million is a fiery 54-year-old professor who wants to change
the way India does business.

Ashok Jhunjhunwala doesn't teach business, though. He teaches
engineering at the Indian Institute of Technology in Chennai, one of
the universities that helps make up India's world-class system of
technical schools.

The IITs, as they are known around the globe, have a long history of
turning out top engineers. Thousands of their graduates have
flourished in the global technology marketplace. Many have also stayed
home, or returned to India, to help fuel the world's most quickly
growing tech economy.

But now academics like Jhunjhunwala along with the country's business
leaders want more for their students than good jobs. They're hoping to
instill in their graduates the spirit of innovation and incubation
that has been the earmark of Silicon Valley for decades. They want to
use technological invention to help India ascend.

To put it bluntly, India is sick and tired of simply cranking out the
world's best engineers. It now wants to create the world's best ideas.

To do so, it will borrow heavily from the model perfected in the U.S.
Silicon Valley, where the academics of Stanford mix with bankers and
business experts to create opportunity.

Graduates return home

Not surprisingly, many of the top supporters of IITs push into
"entrepreneurism" are the very graduates who found their way to the
San Francisco Bay Area over the past 20 or 30 years. The lessons
they've learned are now being passed back to their alma mater.

"IIT always undervalued innovation," said Jhunjhunwala, sounding a
tone somewhere between disappointed and indignant. "That's changing,
and so is our culture. You have to have the confidence and the ability
to innovate. What's great about the U.S. is they allow you to fail."

And, in a weird way, learning to fail could be the key to India's
future. The theory goes that fostering an entrepreneurial climate will
help the country overcome the massive internal social issues it faces,
mostly centered on poverty and illiteracy. The Indian intelligentsia
believe deeply that the solutions to these basic social dilemmas will
come from enterprise rather than government.

But that's not the only motivation. From a pure business standpoint,
innovating and creating its own Microsofts and Ciscos logically stands
to benefit India's spot in the global marketplace.

For over a decade now, this country's technology environment has been
built on cost arbitrage or, in plain English, cheap labor. And while
that has served India well, lifting the economy at a pace matched only
by China, the next level of global competitiveness lies in creating
markets, rather than serving them.

So professors like Jhunjhunwala are creating business incubators and
helping students grow into entrepreneurs, fighting to foster a
risk-taking, innovative culture. But as with any fight, there is
resistance.

The reluctant director

Halfway across the IIT campus in Chennai, a city formerly known as
Madras, M.S. Ananth sits in his well-appointed office overlooking the
campus, considering the direction his star professor is taking over in
the electrical engineering department.

Ananth is a chemical engineer by trade but a philosopher by
personality who finished his graduate work at the University of
Florida. He likes to say things like, "Education is the art of living
gracefully in ignorance." He's a traditional academic who wonders
about the role business should play in academia. And he happens to be
Jhunjhunwala's boss, serving as director of IIT Madras for five years.

Primarily, Ananth is concerned that U.S. academic models are creeping
into the IIT system. He worries that "people who are bringing in money
are getting more and more important. That worries me about the U.S.
graduate schools." And it's beginning to worry him about IIT as well.

"As teachers, we were taught that once you learn something, you go to
class and tell people about it," Ananth said. "Now, you go and patent it."

The concern is that profit motive will supersede the search for
knowledge, a notion that academics in the United States wrestled with
in the 1960s.

At Stanford, businesses stemming from academic research are so common
now that the university doesn't even have a formal business incubator.
Entrepreneurship is in the culture.

Rajeev Motwani, a Stanford computer science professor and a 1983 IIT
graduate, understands where the director is coming from but doesn't
see any real threat.

"The IITs are doing the right thing. They have to jump-start the
process," Motwani said. "And one way to do it is to create an
institutional incubation process. It's good for society at large. The
only catch, I suppose, would be conflicts of interest. Are academic
principles being violated? It's a question, but I'm not concerned
about that."

Not in denial

Despite his misgivings, Ananth is not in denial. He understands the IT
boom has created entrepreneurial possibilities never imagined by
chemical engineers of his generation. And so he is overseeing the
creation of a research and development park on the grounds of IIT
Madras, where 620 acres of "academic land," as he put it, will be
transformed into a center where private industry can intermingle with
academic innovation.

"Research parks have made tremendous contributions," Ananth said. "But
you must maintain the academic environment. The university is a place
where you look for unity in concepts."

And it's a place where young students hope to change the world.

Whatever tension may exist on a theoretical level at the IIT is less
evident on a practical plane. Jhunjhunwala and some of his colleagues,
for instance, recognized that his university did not want to get into
the venture capital business. So, true to his philosophy, he innovated.

The professor created a business incubator called the Tenet Group to
help foster technology startups. But, in a classic Indian twist, the
mandate is quite different.

Rather than trying to build the next Yahoo or Google to serve the
world, Tenet's entrepreneurs are hoping to serve the needs of rural India.

As Jhunjhunwala put it: "We formed Tenet with the objective of taking
IIT students to the next level. We also decided to focus on rural
areas, where 700 million of India's 1.1 billion people still live.
We're trying to show that innovation can happen in our own markets. In
doing so, we're coming up with new ideas to help the nation."

Walking around the group's offices, which are integrated into the IIT
campus, one can see many examples of this "socially conscious
entrepreneurship":

•Midas Communications Ltd., one of the earliest Tenet companies, has
grown to deliver telecom services to millions across India using
breakthrough wireless routing. The company employs 600 in Chennai and
does business in 25 other countries.

•Oops Private Ltd. is creating ways to bring video conferencing to
remote villages, using the existing, low-end technologies available.
Oops has figured out a way to do video conferencing on bandwidth as
low as 20 Kbps, allowing kids to attend classes with teachers hundreds
of miles away.

•ReMeDi Ltd. is using similar bandwidth optimization technology to
help villages that have no doctors. And they're delivering the systems
for the equivalent of $250.

The list goes on. Low-cost weather stations. Rural ATMs that cost
about $1,200 compared with the usual $10,000 to $15,000. Thin-client
computers that cost about $100. It's all coming out of an IIT system
once derided for a lack of innovation.

Saloni Desi Crew is a 25-year-old entrepreneur working with Tenet to
create job-training software for small villages so people can be
trained to perform data entry and indexing jobs for clients around the
world.

20 job centers

She has about 20 job centers in rural India, employing about 60 people.

"It's the best for everyone involved," Desi Crew said. "Cost-cutting
for the client. Work for the rural areas."

Whether these ideas translate into real money and big companies
remains to be seen, although Jhunjhunwala stresses that the rural
solutions that work in India would logically translate to
underdeveloped nations worldwide.

If anything, the people behind the Tenet Group hope to do even more.
As one of their signs in the hallway says, their dreams are big:
"Doubling per-capita rural GDP of India" and "Building a few
billion-dollar telecom product companies in India."

A key obstacle

One of the key obstacles facing India's push to create a high-flying
startup culture is the environment in which the students and
entrepreneurs operate.

There is no institutional memory to tap into, no history or tradition
of entrepreneurship to cull. But there is a scattering of successful
IIT graduates to draw from.

In the Bay Area, groups like the Indus Entrepreneurs and Pan IIT have
formed to help Indian startups stateside and back in India. They offer
practical advice and even venture capital in some instances.

Indeed, in Chennai, Professor Jhunjhunwala sees his vision being realized.

"Innovation happens when three types get together: a professor, an
experienced businessperson and a student who does not know it can't be
done," Jhunjhunwala said.

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kumar