Tuesday, March 31, 2009

Boeing Opens R&D Center in Bangalore

Here is a new article that came over the newswires. The link below is for a local on line newspaper in India.


Here are some exerpts that caught my eye:

Bangalore, March 31 (IANS) Global aerospace major Boeing has set up a research and technology lab here to develop advanced aerospace technologies and solutions for its next-generation products and services, a senior official said Tuesday.

The India lab, Boeing's third of its kind outside the US, will initially have 30 aerospace engineers working on multiple projects that include advanced aircraft and spacecraft designs and new structure and materials technologies.

"Another 100 engineers will collaborate with our various projects being carried out with Indian academia, research and development (R&D) institutions and private and public enterprises," Boeing chief technology officer John J. Tracy told reporters at the unveiling of the lab here.

"The investments are in millions of dollars from our global R&D budget, which runs into billions of dollars per annum," Tracy added.

Boeing has six advanced R&D labs across the US, and one overseas lab each in Australia and Spain - which together employ about 4,100 engineers.

Clarifying that Boeing was not downsizing its operations in the recession-hit US or shipping projects to this country, Tracy said India's exceptional talent pool with high math quotient and analysis skill was the prime reason for locating its third overseas R&D lab in Bangalore.

"Core technologies are vital for global aerospace eco-system comprising R&D, engineering and IT (software). The criteria is to develop cutting-edge technologies to ensure affordability, breakthrough performance, sustainability and eco-friendly products and services to our customers worldwide," Tracy affirmed.

It is interesting to note that Boeing has specifically called out the "high math quotient and analysis skill" of Engineers trained in India.

The question in my mind - why go halfway across the world just to hire 130 engineers? Can't we get them here in Seattle? Don't our engineers have high math quotients and analysis skills?

What am I missing?

Wednesday, March 25, 2009

Brother, can you please spare a Nano?

Say what?

No, I did not mean to imply the cute little portable music machines the fruit company puts out. They are now very ubiquitous, and a fashion statement to boot. I was pointing to the equally cute, and soon to be ubiquitous mode of transportation for the masses - in the developing world.

You see, it appears that history is about to repeat itself. Back in the 1920's, Henry Ford, the great capitalist, thought it would be a great idea to use mass production techniques to build a car that even his employees could afford to buy. Back then, the assembly workers' wages weren't much to write home about, let alone buy a car with. Anyhow, the story goes that Ford designed and built the model T and mass produced it by the millions, and the rest, as they say, is history.

Well, fast forward to 2009, and a capitalist called Ratan Tata has done it again. This time, his objective is a little different. He wants to sell a car to some 50 million motorcycle riders in India. But Ratan Tata is a different breed of capitalist. His self proclaimed objective is to "go to bed every night knowing I have not harmed anyone". Refreshing? Considering most Harvard trained executives live to "maximize shareholder equity", or "optimize workflow", you bet his objective is quite refreshing. And if you look at the picture of this poor Indian chap with his whole family on a motorbike (no helmets or seatbelts, mind you), you see exactly why he feels that way. The miracle is, I think, he feels, while most others figure, calculate, strategize, optimize.......

Well, Mr. Tata put 500 of his best engineers and marketers to work on figuring out what will make a typical motorcycle owner to trade up to a car. The biggest barrier was price. A lot of motorcycle owners who shell out 50,000 to 75,000 Rupees (about $1000 to $1500) for a motorcycle, they found, would rather have something safer that would shield them and their families from the elements. But they could not afford the 200,000 rupees ($4000) for an entry level car. But they would seriously consider something that cost around 100,000 rupees (around $2000). So, the engineers went to work on designing a car that would be profitably sold for around that price. Mr. Tata made it clear that he wanted it to look visually appealing, while taking liberties on cost where it did not matter. Gone were all power accessories, fancy seats, and rear hatch. So were two engine cylinders. Even the tiny 12 inch tires are fastened with only three lug nuts instead of four or five. But it had to have four doors (anything less is not a car in India). Not only did it have to seat four in comfort, it should get around 50 mpg gas mileage. The result has been nothing short of impressive (see pic). On March 23, the Tata Nano was launched in India with much fanfare. Advanced bookings for the initial production lots were oversubscribed several times over, so Tata Motors, the manufacturer, had to resort to drawing lots to pick the first 100,000 lucky owners. Production is expected to ramp to around 250,000 next year, and a million a year thereafter, but given the instant success, this will be gone as well.

None of this has escaped the attention of the world press. Last year in the Detroit Auto Show, it was dubbed "the most popular car" and it was not even shown! This year, in Geneva, a new version was shown (see below), which will have a larger engine, all safety and power features expected in Europe, and still cost around 5000 Euros. Tata did not plan on marketing one in the US, but considering the economic situation we are in here, he has changed his mind. So, in spite of all the reengineering and redesign it is going to take to meet the US specifications, he is planning on bringing one here around 2012 or 2013. That will bring affordable transportation (again) to a lot of people who cannot afford it now. I bet a lot of them cannot wait till they get their hands on one.

My kids can't either.

Monday, March 16, 2009

Businessweek - Innovation and Math, Science Achievement Linked

Here is a recent article (March 16) on the ranking of different nations based on their record of innovation. Innovation as in creating new products, new wealth, and therefore greater standard of living for their citizens.


The top of the list is Singapore, followed by South Korea.

We have seen Singapore and South Korea top international math and science tests year after year. It has also resulted in a better quality of life for their people. 25% of the Singaporeans were millionaires last year. That percentage is expected to cross 40% in 2014. The "global slowdown" is not expected to change this appreciably. Why Singapore? One reason given below:

"Government commitment to education is one reason many large drugmakers have made Singapore a base for their manufacturing and research. In January, GlaxoSmithKline (GSK) announced plans to invest $65 million to expand its Singapore operations. Schering-Plough (SGP) is opening a center to conduct research and clinical trials in the country, and Novartis has made Singapore the center for company researchers investigating treatments for malaria, tuberculosis, and dengue fever. "Science education is very good here," says Thierry Draganc, project manager for Novartis' malaria research team. "There's a nice constant flow of young graduates." "

Where is the US in all this? Well, we came in 8th. One of the biggest reasons given here:

James P. Andrew, the leader of BCG's global innovation practice and co-author of the report, says "the quality of the workforce" in the U.S. is the biggest problem that many respondents had. As part of the survey, BCG questioned some 800 high-level executives at U.S. companies, and many put concerns about human resources at the top of the list of concerns. "Are we developing the skills at the high school level?" asks Andrew, explaining the responses researchers often encountered. "Are we making it easy for the best and brightest to study and stay in the U.S.?"

Thursday, March 12, 2009

Outsource Creativity? Surely You Jest.

I admit. I have been hearing a lot about Slumdog millionaire, mostly from word-of-mouth. Everyone seems to be humming Jai Ho (not knowing what it means is OK), and like an unemployment check, everyone has seen it or knows someone who has. Don’t have $10 for a movie ticket? Take heart. It will be out on video on March 31, and you can rent it from your favorite video store or on-line rental firm.

But that is not what caught my attention. What caught my attention was the low key coverage from the media before and after the Oscars. It was as if someone behind the scenes was pulling the strings for the movie to its Oscar glory. Could it be.. I thought. Nah… it couldn’t be. But let me tell you what went through my mind.

Back in the late ‘90s, story goes that the large cosmetics and fashion apparel companies were worried that the West was saturated with their products, profits were thin, and wanted to create new markets in the developing countries. But these countries had thousands of years old tradition of using natural herbs like turmeric, saffron and sandalwood for their cosmetics, and floral aroma for perfume. Something had to be done to get them interested in laboratory born, patent protected $500 an ounce perfumes and $100 a stick lip gloss. Their solution was….to crown Indian contestants in the beauty pageants like Miss World. A string of new Miss World winners, like the now movie star Aishwarya Rai (Pink Panther 2, The Last Legion…) came out of the mill and started peddling beauty products, and Presto! – a new cosmetics and perfume market was born.

So, why do I think something like that may be happening here?

Simple. Follow-the-money.

Let us first look at the cost. Slumdog millionaire cost $15 million to make. It may sound like a lot of money, but if you compare to big name actors like Branjalina, the Cruisemeister , Reese Witherspoon, all command around $20 million per movie, or sometimes a percentage of the take, this is cheap. An average Hollywood “A” movie costs around $100 mil. A high budget blockbuster costs around $200 mil. The other Oscar contender starring Brad Pitt, “….Benjamin Button”, cost $150 mil to make.

That is only half the story. Now, putting my MBA hat on, I looked at the returns, because every movie producer is looking to make a profit at the end of the day. Slumdog is on its way to grossing $300 mil worldwide, “Benjamin” crossed that mark and may end up with $400 mil. Let us do some quick math – for every dollar spent, Slumdog will have grossed $20, and Benjamin would have grossed $2.66. Even the biggest blockbuster of the year, the Dark Knight, made about a Billion dollars, and cost $185 million to make. That is a little over $5 gross per dollar spent. But Slumdog with $20 for every dollar spent? Even after deducting distribution costs and other expenses, this is an insane rate of return by any standards. It is an eye popping difference that will make even a dead Hollywood executive turn in his grave. So, despite all the political rhetoric about supporting “Made in America” things, I expect more Hollywood movies to be made outside the US.

But what about American creativity? Don’t our schools jealously guard our kid’s ability to be creative? What about all the music lessons, orchestra and band concerts? Don’t we have the most creative people in the world?

Well, we have been told we do. And I see the emphasis placed on it by the schools I deal with. But the giant sucking action of insane profits will lead creativity to be outsourced as well. Consider the fact that Danny Boyle, who some consider an eccentric British director who gave us the “Full Monty” and “Trainspotting”, picked up a few slum kids and paid them pittance and got Oscar worthy performance out of them. AR Rahman, who was totally unknown to the world outside India, composed the Oscar winning score in two weeks, for a fraction of the time and money that Hans Zimmer took for “Gladiator”.

So, yes, creativity can be outsourced – and I am betting that if business has its way, it will continue to be.

And please, stop calling me Surely.

Wednesday, March 11, 2009

US Education Secretary Arne Duncan on Public Broadcasting

I just finished watching Arne Duncan on the Charlie Rose show. (March 16 - Added the link to the podcast in case you want to watch)


I had to pinch myself several times during the show, just to make sure I was not dreaming. Here is the nation's highest education official, saying things that I wished every education official had said. Many of these things have been expressed right here in the blog. But there he was, on national TV, saying the right things, popular or not. If a fraction of what he said became reality, we would be in fat city. Here are some highlights of what he articulated:

1. School facilities to be kept open for 12 hours a day or longer.

2. High quality pre school for all

3. Teacher merit pay, and much tougher tenure requirements

4. Removal of ineffective teachers, based on student achievement

5. Higher pay for STEM teachers

6. Start/expand charter schools

7. National standards for core subjects

There is tons more stuff because it is a 1 hour interview with no commercial breaks, but it was a riveting interview. Charlie Rose, the interviewer, is no slouch. He asks very pointed questions, until the guest cries uncle. In other words, you know exactly where the guest stands on every issue. But first, something about Arne Duncan's past, as articulated in the interview, caught my attention. The first thing he has going for him is that he is not an education insider. He was not trained in the education circles to think like a teacher or an administrator. So, he does not have the baggage that comes with someone who is predisposed to defend the status quo. This was quite evident when he unequivocally said the system needs to shed poor teachers, based on student achievement. Second, he said he grew up in a neighborhood where getting to adulthood alive was considered a great accomplishment. His mother ran a tutoring program for disadvantaged kids, and those who stuck with education not only got to live, but some went on to achieve much greater things. Third, he and the president appear to be in lockstep with all the proposals. Lastly, there is an unprecedented amount of money being doled out, $112 billion to be exact, to help implement the ideas. This is the largest spending of our future tax dollars since the GI bill. This is the first instance of such synergy that I have seen, that makes me optimistic.

Do I see pitfalls? Sure. Through the grapevine, I heard the money will be fast-tracked to the state governors, with no rules or accountability clauses spelled out, yet. If the past is any indication, the moment the money hits the states, it gets caught up in local politics, and rarely meets its intended goal. But it is a start. I hope the local citizens will hold their elected representatives accountable for spending that money so it accomplishes its intent.

Monday, March 2, 2009

Are we at the throes of losing our brainpower bailout?

Here is a news story that came over the wires today (text of one of the stories below):


"America's loss is India and China's gain: US study

Washington, March 2 (IANS) Loss of tens of thousands of skilled immigrants to countries like India and China "is an economic catastrophe that will hurt US competitiveness for decades to come", says Vivek Wadhwa, lead author of a new study done at leading American universities.

Wadhwa and his team at Duke, Harvard and Berkeley universities uncovered several trends in their study on the plight of 1,203 skilled immigrants who came to the US from India and China to work or study and returned home:

* Most returnees originally came to the United States for career and educational opportunities. The majority of returnees cited career and quality of life as primary reasons to return to their home countries.

* The most common professional factor (86.8 percent of Chinese and 79.0 percent of Indians) motivating workers to return home was the growing demand for their skills in their home countries.

* Returnees also believed that their home countries provided better career opportunities than they could find in America.

* Most respondents (53.5 percent of Indian and 60.7 percent of Chinese) said opportunities to start their own businesses were better in their home countries.

* Most respondents (56.6 percent of Indians and 50.2 percent of Chinese) indicated that they would be likely to start a business in the next five years.

* Being close to family and friends was a significant consideration in the decision to return home, with many returnees considering their opportunities to care for ageing parents to be much better in their home countries (89.4 percent of Indians and 78.8 percent of Chinese).

* Most of the Indian and Chinese immigrant subjects who returned to their home countries were relatively young (in their low-30s) and were very well educated. Nearly 90 percent held master's and PhD degrees, primarily in management, technology or science.

* Immigrants historically have provided one of America's greatest competitive advantages. Between 1990 and 2007, the proportion of immigrants in the US labour force increased from 9.3 percent to 15.7 percent, and a large and growing proportion of immigrants bring high levels of education and skill to the US.

* Immigrants have contributed disproportionately in the most dynamic part of the US economy - the high-tech sector - co-founding firms such as Google, Intel, eBay and Yahoo.

* In addition, immigrant inventors contributed to more than a quarter of US global patent applications. Immigrant-founded US-based companies employed 450,000 workers and generated $52 billion in revenue in 2006."

The story pretty much sums it up. We have been getting a brainpower bailout for the last few decades, and now the trend is reversing. Voluntarily (because the living conditions are improving elsewhere), or involuntarily (because the government is clamping down on H-1 visas), the brain drain appears to be in full force, with no end in sight.

Let us take a minute and think about why this reverse brain drain is taking place at all. For decades now, the vast majority of graduate students in the graduate schools in Science and Engineering have been foreign born. The distribution by nationality pretty much imitates world demographics, with China and India leading the numbers. When the rest of the US educated students were aspiring to be doctors, lawyers, businessmen and investment bankers, these immigrants were getting their masters and PhDs in science and engineering, and starting up companies in Silicon Valley that fueled most of the high tech boom in the 1990s, and continue to do so to this date (albeit at a much slower pace).

What does this mean for our efforts to "rebuild" as Obama would like to? Plenty. But first, I think we need to connect the dots, and understand how a nation becomes prosperous enough to support the standard of living that we have all come to love. Here is my attempt at laying out the process:

1. Any economy that aspires to dominate the markets needs some way to continuously come up with better products and services (and no, financial derivates do not fit the description of an "innovative product or service").

2. Not only that, it needs to quickly find a way to mass produce it faster, better, and cheaper than anyone else.

3. Then go back to #1 and do it over and over again.

Sounds simple, but the US economy has stumbled at every step in every endeavor it has undertaken. We used to have a lock on step #1 and step #2 in early 20th century. Then later on we lost the lead in step #2 to Japan, Taiwan and Korea, and lately, to China. Now we are at the threshold of losing step #1 to Japan, Korea, Finland, Singapore, and most recently, India and China. If we do lose, then we are forever second best, a position that no American will relish. So, I think it is important to understand how we became economic leaders, and what we can do to remedy the situation.

Here is how I connect the dots. In order to come up with more innovative products which will be successful in the marketplace, one needs to have a large pool of Research and Development from which to draw, and create new patents for new products. Unfortunately, using Google to find answers for "innovation" does not fit this criterion. We need more science and engineering graduates willing to go into research and development, and the R&D funding from public and corporate sources to help finance them. But we need to create those science and engineering graduates first. Which means we need more high school graduates excited about science and engineering. Which means we need more middle school graduates excited about science and math, and are willing and able to take challenging math and science courses in high school. Which means we need more elementary school graduates who know their math facts cold, are well versed in algebraic fundamentals like manipulating fractions and long division, and are excited to get into math competitions in middle schools. It means we need more middle school teachers who are math and science graduates themselves, and are excited about the prospect of educating a whole new cadre of nation builders. It means we need more elementary school teachers who have enough real math and science education in college to be able to teach elementary school kids real math, rather than the watered down version being pushed in school districts all over the nation. We need all the materials, the support structures, and most of all, the leadership to make it all happen.

I continue to be disappointed with the standard of material that is considered "acceptable" in today's education system. In my recent trip to India, I saw that a typical 10th grade graduate there is more likely to have a better education than a typical 12th grader in the US. Then I hear that "but our kids catch up in college" from some parents and teachers. I beg to disagree. Once a student graduates 12th grade with today's version of "reform" math, the doors will be forever shut for them in science and engineering. They most probably lost the battle in elementary school if they were not taught the basics well, and never realized it.

Recovery from a hole that we have dug so deep has to start somewhere. One of my friends often says "when you are in such deep doo doo, you better stop digging". I think it is a great place to start.