In 1793, Eli Whitney invented the cotton gin. With its advent, a worker, who was earlier able to remove the seeds from only one pound of cotton daily, could generate over 50 pounds of cleaned fibre. The gin transformed the US, so much so that ‘King Cotton', till the 1861 Civil War, was contributing more than half of its exports.
Whitney was an inventor who was also a businessman. So were Cyrus McCormick — whose mechanical reaper in 1831 revolutionised wheat farming — and John Deere, who, with his cast-steel plough six years later, made it possible to work the heavy, yet fertile, prairie soils of the Mid-West.
These men were the forerunners to a succession of American inventor-businessmen in diverse fields: Matthias Baldwin (improved coal-fired steam locomotive); Samuel Colt (revolver); Elisha Otis (elevator); Isaac Singer (sewing machine); George Babcock (water-tube boiler); Alexander Bell (telephone); Thomas Edison (1,093 patents!); George Westinghouse (alternating current power systems); George Eastman (roll film); Charles Hall (aluminium-making process); Emile Berliner (gramophone); Henry Timken (tapered roller bearings); Benjamin Holt (crawler tractor); Herbert Dow (brine chemicals extraction); King Gillette (disposable razor); Henry Ford (automobile); Harvey Firestone (pneumatic auto tyres); Leo Baekeland (bakelite); Glenn Curtiss (aircraft design); Willis Carrier (air-conditioning); Arnold Beckman (pH meter inventor and funder of William Shockley's silicon transistor firm that gave birth to Silicon Valley); Bill Lear (car radio/Lear Jet); Walt Disney (multiplane camera); Edwin Land (Polaroid camera); and Malcolm McLean (shipping container).
Garage Geeks
To the above, one may add the more recent Silicon Valley ‘garage' innovators: Bill Hewlett and Dave Packard (HP); Robert Noyce and Gordon Moore (Intel); Bill Gates and Paul Allen (Microsoft); Steve Jobs and Steve Wozniak (Apple); John Warnock and Charles Geschke (Adobe); Leonard Bosack and Sandra Lerner (Cisco); Jerry Yang and David Filo (Yahoo!); Larry Page and Sergey Brin (Google); Chad Hurley, Steve Chen and Jawed Karim (YouTube); and Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin and Chris Hughes (Facebook).
What this list, by no means exhaustive, captures is a fundamental feature of American capitalism: One whose chief protagonists have not been the J.P. Morgans, Vanderbilts, Rockefellers, Carnegies and other ‘pure' businessmen as much as the people making money out of generating new ideas, things or even industries.
When businessmen are inventors to start with, it is natural for their firms also to imbibe the culture and for industrial research to be accorded the same priority as marketing or finance. It is this culture of innovation – the constant drive to create something new and success in doing so – that has been central to the American system's vitality. A crisis, if at all, would arise from the failure to discover new products and industries to make up for eroded competitiveness in existing ones. And that is precisely what Washington is worried about.
This kind of capitalism is quite different from the one in India, where businessmen have arisen more from the bazaar than the fields, labs or the shopfloor.
Innovations in manufacturing remained largely artisanal in nature, not amenable to scaling-up. The Vaishyas, no doubt, excelled in forging long-distance trading and banking networks and, within this, pioneered innovations from the hundi bills of exchange to fatka forward contracts.
However, their second-to-none skills at buying and selling proved inadequate when factory-based manufacturing became a lucrative proposition after World War-I. Dependence on borrowed know-how was the only option available.This legacy has continued even now, especially in process industries such as refining, petrochemicals and fertilisers (where the technology suppliers are wholly foreign) or IT/telecom equipment (where production simply entails assembling). The levels of originality in manufacturing have been confined to process adaptations for making cheaper or rugged versions of existing products.
Marketing innovations
At the same time, Indian entrepreneurs have genuinely innovated in marketing and creation of unique organisational forms for servicing large, low income populations.
Take sachet packaging of shampoos and paan masala, the Amul model of procuring milk from millions of farmers, the Aravind Eye Hospitals or even the now-discredited microfinance institutions. Mr Sunil Mittal's successful strategy of outsourcing everything from telecom network rollout and management to customer billing — while retaining just the Airtel brand — can also be considered an ‘invention', just as the entire business of IT services offshoring bears a distinct Indian signature.
As regards product innovations, it is only now — with the Tatas' low-cost Nano car or Swach water purifier — that things are beginning to be ‘made' in India. It says a lot about our capitalists that some 20 years after liberalisation, the country's leading patentees are still the good old CSIR, DRDO, BHEL, SAIL and the IITs.
Also, while there are six Indians (and no Chinese) in the Forbes' list of top-50 billionaires, not a single Indian company figures among the world's 50 biggest patent applicants (against two Chinese — Huawei Technologies and ZTE Corporation, ranked No. 2 and No. 22 respectively). This state of affairs has to change, and that can happen only with the emergence of a new post-Vaishya class of inventor-businessmen.
Whitney was an inventor who was also a businessman. So were Cyrus McCormick — whose mechanical reaper in 1831 revolutionised wheat farming — and John Deere, who, with his cast-steel plough six years later, made it possible to work the heavy, yet fertile, prairie soils of the Mid-West.
These men were the forerunners to a succession of American inventor-businessmen in diverse fields: Matthias Baldwin (improved coal-fired steam locomotive); Samuel Colt (revolver); Elisha Otis (elevator); Isaac Singer (sewing machine); George Babcock (water-tube boiler); Alexander Bell (telephone); Thomas Edison (1,093 patents!); George Westinghouse (alternating current power systems); George Eastman (roll film); Charles Hall (aluminium-making process); Emile Berliner (gramophone); Henry Timken (tapered roller bearings); Benjamin Holt (crawler tractor); Herbert Dow (brine chemicals extraction); King Gillette (disposable razor); Henry Ford (automobile); Harvey Firestone (pneumatic auto tyres); Leo Baekeland (bakelite); Glenn Curtiss (aircraft design); Willis Carrier (air-conditioning); Arnold Beckman (pH meter inventor and funder of William Shockley's silicon transistor firm that gave birth to Silicon Valley); Bill Lear (car radio/Lear Jet); Walt Disney (multiplane camera); Edwin Land (Polaroid camera); and Malcolm McLean (shipping container).
Garage Geeks
To the above, one may add the more recent Silicon Valley ‘garage' innovators: Bill Hewlett and Dave Packard (HP); Robert Noyce and Gordon Moore (Intel); Bill Gates and Paul Allen (Microsoft); Steve Jobs and Steve Wozniak (Apple); John Warnock and Charles Geschke (Adobe); Leonard Bosack and Sandra Lerner (Cisco); Jerry Yang and David Filo (Yahoo!); Larry Page and Sergey Brin (Google); Chad Hurley, Steve Chen and Jawed Karim (YouTube); and Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin and Chris Hughes (Facebook).
What this list, by no means exhaustive, captures is a fundamental feature of American capitalism: One whose chief protagonists have not been the J.P. Morgans, Vanderbilts, Rockefellers, Carnegies and other ‘pure' businessmen as much as the people making money out of generating new ideas, things or even industries.
When businessmen are inventors to start with, it is natural for their firms also to imbibe the culture and for industrial research to be accorded the same priority as marketing or finance. It is this culture of innovation – the constant drive to create something new and success in doing so – that has been central to the American system's vitality. A crisis, if at all, would arise from the failure to discover new products and industries to make up for eroded competitiveness in existing ones. And that is precisely what Washington is worried about.
This kind of capitalism is quite different from the one in India, where businessmen have arisen more from the bazaar than the fields, labs or the shopfloor.
Innovations in manufacturing remained largely artisanal in nature, not amenable to scaling-up. The Vaishyas, no doubt, excelled in forging long-distance trading and banking networks and, within this, pioneered innovations from the hundi bills of exchange to fatka forward contracts.
However, their second-to-none skills at buying and selling proved inadequate when factory-based manufacturing became a lucrative proposition after World War-I. Dependence on borrowed know-how was the only option available.This legacy has continued even now, especially in process industries such as refining, petrochemicals and fertilisers (where the technology suppliers are wholly foreign) or IT/telecom equipment (where production simply entails assembling). The levels of originality in manufacturing have been confined to process adaptations for making cheaper or rugged versions of existing products.
Marketing innovations
At the same time, Indian entrepreneurs have genuinely innovated in marketing and creation of unique organisational forms for servicing large, low income populations.
Take sachet packaging of shampoos and paan masala, the Amul model of procuring milk from millions of farmers, the Aravind Eye Hospitals or even the now-discredited microfinance institutions. Mr Sunil Mittal's successful strategy of outsourcing everything from telecom network rollout and management to customer billing — while retaining just the Airtel brand — can also be considered an ‘invention', just as the entire business of IT services offshoring bears a distinct Indian signature.
As regards product innovations, it is only now — with the Tatas' low-cost Nano car or Swach water purifier — that things are beginning to be ‘made' in India. It says a lot about our capitalists that some 20 years after liberalisation, the country's leading patentees are still the good old CSIR, DRDO, BHEL, SAIL and the IITs.
Also, while there are six Indians (and no Chinese) in the Forbes' list of top-50 billionaires, not a single Indian company figures among the world's 50 biggest patent applicants (against two Chinese — Huawei Technologies and ZTE Corporation, ranked No. 2 and No. 22 respectively). This state of affairs has to change, and that can happen only with the emergence of a new post-Vaishya class of inventor-businessmen.
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