Image Source: http://en.wikipedia.org/wiki/File:Shunsuke1_20080622.jpg

Given that the football world cup is over, I may have missed the window on this one, but it still is interesting!

The relevant current rules in football (that’s ‘soccer’ in Yankeeism  ) as as follows: teams play during 90 minutes. If, at the end of regular time, teams are tied (an event which, contrary to other sports, occurs with high probability), then they play an extra time. If the draw persists after the extra time, the winner is selected by penalty shoot-outs (a resolution judged “unfair” by many people).

Here, the incentive to perform efficiently is affected strongly by the ordering of the tasks (regular time, followed by extra time, followed by penalty shoot-out). This is illustrated in the following proposal: In the interest of making game more exciting, instead of shooting penalties after extra time (as it is currently the case), could it be preferable to shoot them before extra time and let them count only if the extra time is unsuccessful in breaking the tie?

The intuitive basis for such a proposal is the following: if penalties are shot before extra time, the team that wins (or loses, resp.) the penalty shoot-outs has the greatest incentives to preserve (or break, resp.) the tie and therefore plays more defensively (or offensively, resp.) than if penalties are shot after extra time. The analysis of this proposal comes down to determining whether the total level of offensive play is greater when both teams have average incentives to attack (penalties after extra time) or when one has high and one has low incentives to attack (penalties before extra time).

This proposal was investigated by Dr. Juan D. Carrillo from the Dept. of economics at University of Southern California. His theoretical analysis of the proposal was published in the paper “Penalty Shoot-outs: Before or After Extra Time?” in the Journal of Sports Economics in 2007.

His analysis suggests that moving penalty shoot-out to before extra-time could potentially make for a more exciting game. However, this doesn’t really mean it will work in practice. Theoretical analysis fails to take various psychological factors into account, including but not limited to: players have a tendency to overestimate their chances of winning at penalty shoot-outs, teams might feel less psychological pressure if they lose at penalty shoot-outs (it is just a matter of bad luck), public has a taste for close games.

So in order to put this hypothesis to test, Liam Lenten, Jan Libich (La Trode University, Australia), and Petr Stehlik (University of West Bohemia, Czech Republic) conducted an empirical assessment [link]. They found that bringing the shoot-out before extra-time substantially alter the players’ incentive in extra-time to produce more overall attacking play. In fact, the odds of extra-time scoring went up about three-fold.

So there might be a case for such a rule change after all!

The most salient argument is that: since biofuel is ‘brewed’ from organic sources like corn, and its easy to grow corn, the source serves to reduce our dependence on fossil fuels, and since we are not burning fossil fuels, we are reducing global warming.

While its true that the source of biofuel is organic, not all sources are equally viable. For instance, consider corn. Corn gives you a 3:1 energy yield, i.e. you spend 1 unit of energy to get 3 units of energy from corn. Not the most efficient. Also, this one unit of energy often comes from fossil fuels. Secondly, ‘brewing’ ethanol from corn requires extremely sterile and specialized equipment. They require, for instance, large stainless steel containers. Now this 3:1 ratio does not take into account the kind of energy needed to manufacture such high grade stainless steel (this cost is assumed to be amortized across multiple crops of corn that can use it to produce energy). But the fact of the matter is, if everyone switches to corn-based fuel, then the manufacturing of such huge numbers of high-grade steel will only serve to make the CO2 emissions a more acute problem. Thirdly, corn is a tropical crop which needs large amounts of water, and is susceptible to diseases. This makes growing corn a resource intensive enterprise, not my idea of a solution to reducing our (non-renewable) energy consumption.

An unfortunate side effect of using corn for biofuel is the following: large amounts of corn is being diverted from food supple chain to the industry. This is raising the food prices world wide. This has made growing corn very profitable, and so countries like Brazil are deforesting the amazon at an alarming rate to plant corn. Such logging, deforestation, and burning is accelerating global warming even more! (for more details visit the Time Magazine article on Clean Energy Scam).

The problem, if fact, is not with biofuel itself, but with corn. Corn is not the most energy efficient choice, its traditional use is as food, and the procedure to brew fuel is too complex, sensitive, and sophisticated. So if we can have a source which is (a) energy efficient, (b) not a food source, and (c) easy to manufacture fuel from, we might be able to have a viable ‘green’ source after all.

We do have such a source: Biomass. That’s right, biomass, the dead and/or decaying compost of plant and animal remains. Think about it. Biomass has been used in rural India as a source of fuel for cooking (Gobar Gas). So can we use biomass as the source for biofuel like ethanol? Yes, we can! Mark Holtzapple from Texas A&M University is working on this. As he says it “I have been working on biofuels since before it was cool”.

In an interview (on Biofuel, in the radio show Biased Transmission) , Mark Holtzapple said that biomass can be used as a viable source for biofuel with tremendous success. The energy yield is as high as 18:1. The brewery is easy to build and maintain. The experimental setups he has is made of plastic buckets! It uses natural bacteria and enzymes to break the biomass down into ethanol. Its easy to use, easy to maintain, and can provide energy without taking away valuable food from the market, without incentivizing developing nations to destroy their forests and plant something profitable. Its all great and wonderful, but no one is paying attention.

Why, you ask? Its because the US government, and the oil lobby, has too much invested in corn that it doesn’t want to go back on it, not matter what the costs. So the next time someone talks of corn based biofuel, please cringe a little because that’s the right thing to do.

While I agree with all of the points and suggestions in the original post, I think we are missing some important points. Looking at it as a problem in economics, the effort is to create a market for PhD programs in India. Like with many products, the PhD Program in India needs market makers, quality product, and a demand for the product. Lets looks at each aspect more closely:

Market Makers:

In order to get students in pursue PhD, you need to create a market for PhDs. Currently, there is very little market for PhDs in India. There are a select few openings in academic institutes of repute, and that’s about it when it comes to a real market in India. Granted that more and more industries are looking for PhDs, but are very picky about their recruitment (and rightly so). Additionally, once you get a PhD you become overqualified for most of the jobs in the market, and so you job prospects actually diminish with a PhD. This trend needs to be reversed. Only if PhD is made an attractive prospect will students pursue it.

Quality Product

Even if there is a market, if the product offered is not of quality, then you cant sell the product. The same is true for PhD programs. How many PhD programs in India are actually of international merit? Very very few! I know of people who have graduate with a PhD from Indian universities without a single publication at an international venue! If no result of this person’s work was deemed original and significant by his/her professional community, then how can the entire dissertation be deemed worthy of a PhD by the university? Furthermore, if that is the quality of the PhD, who job prospect can the person expect after graduating?

But in order to produce quality PhDs, you need to recruit quality PhDs to begin with. Its not easy, its expensive, but its got to be done. There are so many Indians with PhDs abroad who want to return to India. All you need to do is provide them with a venue for research, with good funding and competitive pay and you can get them. But a sincere effort needs to be made to recruit and retain such researchers.

There needs to be a quality control mechanism within the PhD program and the local professional community to ensure that PhD students do produce quality results. It could be anything from mandating publications in international venues, to holding conferences and symposiums on high-quality research being done nationally/locally.

There needs to be encouragement for research through independence, autonomy, authority, and responsibility.

Demand for the product

You have a market for PhD programs, you have quality programs in place. You still need a demand for these programs. Here’s where marketing, prospecting comes in. It is very important the students are educated about higher degrees, their requirements, benefits, and future prospects. There needs to be massive talent scouting with pin pointed, personal hard-sell efforts by each educational institution to recruit select PhD candidates in each program who can help establish and flourish the institutes’ reputation, profile, and research potential.

Recruitment alone is not sufficient, retention is equally important. Given that the program is already of high quality, the best way to retain good PhD students is best described in Abi’s original post.

Until we have these basics taken care of, no amount of effort on funding, industry participation, etc. is going to help us get more PhDs of decent quality.

We need to take steps to eliminate poverty, there is no two ways about it. But the question is, what exactly does it mean to eliminate poverty? If we were to take all the money from the wealthiest and give it to the poor, would we have succeeded in the mission? Is elimination of poverty the same as more money to the poor? I think not. It goes much beyond that. We are talking about establishment of a system that ensures the economic independence of the poor, and a sustainance, if not promotion, of their socio-economic position. That makes the whole Robin Hood sytle scheme of wealth distribution a sure recipe for disaster.

I am not saying that aid doesnt help. It most definitely does, but it is not a solution in itself. This is obvious from the fact that despite heavy aid being given to nations in africa and other third world countries, world poverty continues to be a major concern. One of the primary reason for this the reliance on the top-down style of aid distribution. Money is poured into the institutions at the highest level and mechanisms have been developed to let those funds trickle down to the poor and needy. This, obviously, hasnt worked well. There are a many reasons why it hasnt. One being that of corruption, another being that of inaccurate economic models that world well on macro scale but when scaled to microlevels, it simply breaks down and doesnt deliver.

One of the solutions to the problem of diminishing retruns down the bureaucratic model is to start from the bottom itself, i.e. instead of channeling money through large upper level financial institutions, setup shops to deliver the money to the end recipients themselves and eliminate the middleman. Microcredit has been one of the most successful efforts in this direction.

The most amazing thing about microcredit is that it has historically seen one of the highest repayment rates by any standards. Microcredit, as the term implies, involves giving very small amounts of money as loans to the poor and unemployed who are refused loans by the established financial institutions because they are considered ‘unbankable’. These loans are used to generate self-employment and income. Theoretically, this income is to be used to repay the loan; the repayment risk is coupled with the failure rick of the self-employment itself. In order to ensure repayment, the microcredit bank forms ‘solidarity groups’; they are small informal groups (mostly of women from the same village) who meet with the bank representatives weekly to conduct business. Each group takes collective reponsibility for loan repayment that distributes the risk over more than one individual and has resulted in a very high repayment rate.

This finance model has been deployed sucessfully in rural india and has benefitted immensely from this scheme. One of the most widespread microfinancial institution in India, SKS, has till date provided over Rs. 240 crores ($52M) to over 220,000 women in the indian villages with a repayment rate of over 98%.

There is a reason why most of the microcredit schemes have mostly women as clients. The reason simply is that women are better at repaying their loans, and given the women an opportunity is the same as giving the entire family an opportunity. Especially in rural India, among the poor, the man of the household spends all of the money on liquor and gambling. It is exact opposite with the women. Women have been known to be more responsible and utilize the money to give their families a better life and create more opportunities.

One of the expectations of the microcredit scheme was to see the businesses created by the women to grow as their experience and income increase. But in most the places in rural India, this hasnt happened. It was seen that women use the microcredit given to them to start a sucessful busniness and take more loans to expand the business, but only to a certain extend. After that, they continued to borrow money from the microfinancial institution, but used the money to provide a better education for their children. In almost all the areas in India, this has been a consistent tendancy. All the women strive to provide the best education they can afford to their children. It was a side-effect that wasnt expected when the scheme was first introduced, but seems to have achieved a goal higher than expected. Microcredit was designed to alleviate the poor from poverty through opportunity, but it has inadvertedly provided a platform for the poor to empower their future generations in a manner that will provide them with more opportunites than could have been possible otherwise.

Its amazing how far a little help can go. To use the cliched expression, ‘ Give a man a fish, he’ll eat for a day. Teach him how to fish, and he’ll eat for ever’

The indian industry is largely a service industry and less a manufacturing or products based industry. Considering the maturity the industry has reached, it is time to move towards a products’ business model. This is not a statement arising out of a prejudice against, or contempt for, the service industry. The basic argument against services industry is that, by predominating our economy on the services industry, the factors influencing our economy tend to be less under our control and more under the control of the economies that we service. This lopsided dependence puts our economy more at risk of turning turtle like that of Brazil in the nineties.

This not a propaganda of the “swadeshi” movement that RSS has been attempting to promulgate. This is reality.

India’s economy has what it takes to look inward to fuel itself. There is sufficient captive market to keep the money circulating, and with the partially open economy India Inc. cannot afford to slack on quality either.

The unfortunate fact is that, the indian companies seem to wake up to gobal competetion only if that the last resort. There is very little proactive investment for striving towards redefining global standards.

Take the motorbike industry for instance. Till 1995 Hero Honda was the only 4 stroke bike around and there was very little choice for anyone who wanted to buy one. Then came the roumour that china was planning to dump really cheap bikes into the indian markets for a price upto Rs. 20k less than average indian bike. This jump started the innovation in the indian bike industry, and now we are at the forefront with immumerable patents to the credit of TVS, Bajaj, and Hero.

The same arguments hold true for indian software industry as well. Consider the software services companies, the kind of talent pool that is at their disposal, they are still happy with software consulting. Which means they are in business only as long as the industry in the US, the europe are willing to spend money for services from them. There is nothing that they can offer off the shelf for firms looking for a solution. There is nothing that these cos lack to do the latter. But they choose not to. Now with huge anti-outsourcing sentiments making waves, may be its time these companies wake up and smell the coffee.

Also, we have seen a huge influx of MNCs into India providing much needed employment. But it would be stupid to expect MNcs to work anywhere towards the health of indian economy. They are here to make money, their survival depends not on the health of our economy, but on the health of the economy of the country they are based on. So if anyone needs to look out for our economy, it’s gotta be India Inc. and there is nothing altruist about it. If India Inc. has to survive, indian economy needs to be in good shape.

They are the ones who gotta build india, coz no one else is gonna bother to.Not sure if this makes much sense, let alone if the flow of ideas is coherent. But then, when has it ever been that way? It’s my blog… what more proof do need?