Pradip K Bhaumik and Arindam Banik
The war for the next generation removable digital storage medium, now unfolding in all its viciousness in front of us has all the ingredients of a high drama. Both Toshiba and Sony are aware of the dangerous consequences of losing the war – as well as the benefits of winning it. It is a high stake war.
The consumers have a need to store higher and still higher amount of digital information in a single medium and this need has spawned the development of floppy diskettes, compact discs (CDs), and later digital versatile discs (DVDs). A DVD can store 4.7 GB of data where a CD could store about 700 MB and so you have a whole 3 hour movie stored in a single DVD which otherwise required 3 or 4 CDs. By now, customers’ expectations have gone up where they would expect to have a high resolution movie stored in a single disc. Simultaneously, technologies have also grown further where a single multilayer disc can store up to 100 GB of data enabling storage of high definition movies. The only problem is that we have not one but two competing technologies – both vying for that single slot.
Announced in 2002 by nine companies including Sony, Hitachi and Philips, the Blu-ray technology promises 25 GB on a single layer of a BD disc while the High Definition DVD (HD-DVD), with a storage capacity of 15 GB per layer, was sanctioned by the DVD Forum in 2003. A distinct advantage of HD-DVD for the disc manufacturer is that the stamping machines for regular DVDs require only minor modifications to make HD-DVD discs. Toshiba, a traditional rival of Sony is now ready to compete again in this arena. Between them they have been able to split the whole industry into two opposing camps each claiming the superiority of their standard over that of the other.
Sony seems to have learnt its lesson very well from a similar situation in the seventies when Panasonic with its VHS format for video cassettes, came from behind and overtook Sony even though Sony’s Betamax was arguably technically superior. Sony lost out as it did not share its standard with others while VHS technology was licensed to many among both VCR manufacturers and content providers and soon emerged as the de facto industry standard. This also reminds us of a similar story when Apple computers lost to the Wintel machines despite having a better product.
This time too BD is perhaps technologically superior to HD-DVD but there is an even chance that HD-DVD may turn out to be the eventual winner. Both of these use the low frequency blue laser unlike the red laser used in CDs and DVDs, allowing discs to store data at higher densities required for high definition video storage. Both formats have multiple layer capability and so technically BD can have up to 100 GB capacity in a dual side dual layer BD disc, while Toshiba has already developed a prototype three-layer 45 GB HD-DVD disc. There are differences in the compression technologies used but either format would offer vastly improved picture quality and consumers may not experience significantly different viewing pleasure between the two formats.
As neither format is likely to offer lossless recording, it is possible that a later generation of technology may make these discs also obsolete just as CDs and DVDs may become obsolete after the high definition discs are released in the market.
The ultimate success of either format will not depend only on the storage capacity of the discs. Thanks to a special hard coating developed for BD discs, they can reportedly withstand even screwdriver swipes unlike other optical media like CDs and DVDs which can be damaged even by tissue wipes. BD also claims to have superior security features by way of BD+ and the ROM mark which may make it the content and media companies’ darling. The ROM mark is designed to tie the recorded disc with the specific burner used to prevent large scale copying while BD+ is a safeguard against future cracks and hacks.
HD-DVD is cheaper and easier to manufacture and has product familiarity on its side as it conveys a high definition version of DVD. The lower price of players, recorders and discs would be a significant advantage as would being the first-mover when Toshiba launches its HD-DVD any time now. But Sony’s strength in the content market with its ownership of Hollywood studios, media companies and dominant position in the games market with Playstation cannot be wished away. It thus appears to be an evenly poised war with formidable armies lined up on both sides.
HD-DVD has the backing of the DVD forum, which is an international membership-based organization created to enable the DVD platform grow through technical improvement and innovation. Ironically, Sony Corporation is one of the founding members of the DVD forum but it sponsored the Blu-ray Disc association (BDA) as an alternate forum for BD thus implying that BD incorporates a technology distinctly different from that of DVD. Almost all the global bigwigs among hardware, software, media and content companies are covered between the two with many joining both.
Both sides seem confident about winning in the market where other stakeholders besides the consumer like the manufacturers, content providers, games console producers, computer manufacturers, etc. will also have significant roles. There are reports of Toshiba encouraging low-cost Chinese producers to start making HD-DVD players and recorders. If true, such early commoditization of the product will hurt all. Attempts of mediation and negotiation to avoid such a high-cost war have failed as each side asserts the superiority of its technology and strategy. The absence of a regulator leaves the market as the only arbiter.
From the sidelines, the whole episode may appear as wholly avoidable and costly for the two camps and particularly for the consumers when seen from an Indian perspective still used to notions of guiding hands of the government but for both the warring sides any government role is conspicuous by its absence. The only Indian company in the middle is Moser Baer and it has hedged its position by joining both the DVD forum and the BDA.
The inexorable march of technology is accompanied by destruction of the old giving way to the creation of the new and guided by the principle of survival of the fittest where fitness is as defined by the market. Particularly for Indian companies, it would seem that development of technology is far less risky than launching products based on new technology. For Indian companies with global ambitions, tracking the details of these technology wars would be of immense learning value, as would be for the government and the various regulatory bodies.
Technology-wise, we began with transfer and graduated to assimilation through adoption. Hopefully it will not take many more years for Indian companies to move up to innovation.
Thursday, February 26, 2009
Understanding Bangladesh from a Neighbour’s Door
The Mahajote’s victory in the recent Bangladesh election may be seen as one of the most important event in the history of Bangladesh. It is eventful because when the whole world was busy to project Bangladesh as a breeding centre for Islamic fundamentalism. The outcome is certainly a paradigm shift. This time the Jote has been able to reach across divides of religion, race, gender and politics and unify her country once again after 1971 war of independence. The caretaker government, election commission, civil society and the army also played a contributory role to conduct such a free and fair election. In fact the other developing economies where democracy is fragile and has had constant threat to the nation state may also learn this experience from Bangladesh.
The idea of projecting Bangladesh as a fundamentalist state may bear serious limitations. The country has its strong root. The culture, Rabindranath, Nazrul, Jashimuddin are all important contributors in order to support her claim as a nation state. One can not just ignore this root for just few episodes dictated by few Islamic fundamentalist groups.
The Mahajote’s win may be explained by high expectations because of repeated political failures. The country’s leaders took hazardous task to grow. At home, wrong policies, and selfish policymakers practically ruined the immense prospect of the country. This time, the Jote has successfully reconnected politics to the young and to youthful idealism. Then they have also tried to give them hope from frustration. The rediscovery of the ideals of liberation war has once again invigorated the young population. Thanks to Sector commanders forum for playing such catalytic role. How the new government will fulfill the challenges is remains to be seen.
The agricultural sector is the biggest challenge to the new government. The role of international agencies and their policy advice to the food-deficit economies such as Bangladesh may have played a significant contributory role to the development of the last year’s crisis. Since the mid-1990s, countries that rely heavily on cereal production – particularly rice – were advised by the international agencies that a highly liquid, global market for cereals would be a healthy and desirable development for all. Accordingly, many countries such as Bangladesh got convinced that it would be safe to cover any shortfall in domestic output with purchases from the international market particularly from India, Myanmar, Thailand and Vietnam. As a result the rice and wheat sectors became less protected. Some countries burdened with high cost of production even dismantled export bans and reduced import tariffs. Some International agencies even argued that there is a glut of food production worldwide as evinced from the downward trend in the real price of rice and wheat in the world market and building of huge food stocks in neighbouring India. India too has misunderstood this issue. Her response to last year’s food crisis in Bangladesh was not at all satisfactory. The policy makers in this region now can think of integrating the whole issue of agriculture, starting from uniform implicit and explicit subsidies (output and input) to pricing of output. Any unilateral decision will distort other markets, encourage informal trade and thus impedes the welfare of the people in the region.
Obviously, the old prescriptions of the international agencies have not worked. There is a need to revisit the old models, analyses and policy recommendations. Fresh long-term forecasts of demand of food items, factoring in new uses and new consumption patterns would be needed to estimate if there is a supply-demand gap emerging in the longer term. Investments in agriculture would have to be revived to increase the local production and this should include investments needed for better water management. Finally, out-of-the-box thinking will be needed to come out with new policy recommendations like creation of regional buffer stocks to overcome volatility in production. Or else, it will be the poor in the poorest countries that will suffer the most due to food shortage in future.
For last ten years, the country has produced result in the manufacturing sector. But the potentials still to be explored. Much of the failures may be derived from partisan politics, and the governments in power. People are disappointed by previous governments.
The most dangerous is security threat and tension across borders. Then there are countries who have been working hard to exploit the situation. India can play a pragmatic role here. Take the case of manpower. The training of man power may have immediate impact in order to improve relationship. It appears that there is a strong relationship between investments in human capital and economic growth in the context of Bangladesh. The need to improve the quality of human resources is particularly important for Bangladesh, given its importance in the attraction of foreign direct investment. Although the developing world accounts for a steadily increasing share of world manufacturing (partly driven by lower wages and costs in that world), competitive advantage based on low wages is inherently a transitory phenomenon: sooner or later, developing countries such as Bangladesh will face the need to improve their skill as other lower cost producers emerge (for example, garments).
Many have argued that the level of education is below the performance required to integrate entrants to the labour force. According to them part of the low productivity levels are partly explained by ineffective education. A significant number of populations have been at the highest risk of low academic achievement. The fact that the poor have low levels of education in Bangladesh highlights the need to address educational issues.
There are many different types of public and private training programmes in Bangladesh in order to address issues such as low skill levels and high rate of unemployment rates among youth. In Bangladesh, ineffective training schemes impede an effective labour market for growth. This is due to limited labour market information systems and weak dialogue between public educational institutions and employers. Government programmes in particular have found it difficult to respond to the changing needs of the labour market, and to provide up-to-date equipment because of bureaucratic and fiscal pressures.
India can help Bangladesh in many ways such as developing English speaking population; increase the number of technical and high-tech skilled population. There is a dearth of semi skilled based educational institutes such as repairing cell phones, and Bajaj Scooters.
The prestigious Indian Institute of Technologies (IITs) may also be advised to open in Bangladesh based on public and private partnership. Indeed, this may help to restrict migration then the reduction of poverty . An economically strong democratic Bangladesh may stabilize South Asia. Needless to mention that availability educated workforce with low level of employability may create more problems for both India and Bangladesh.
It seems useful to mention here that the world as we know today will undergo major changes by the middle of this century. The countries that are unable or slow to respond will have to make room for others that can move quicker and innovation will be the key differentiating factor. In the long term, it may even be possible for some economies to survive only on the basis of their capital or technology, but labour alone may be unable to provide this sustenance. By bringing a large part of their population to the economic marketplace, India, Bangladesh and other South Asian nations will set free their innovation potential which has so far not found any route to reach the market. When this happens, the region will surely be a different place.
The idea of projecting Bangladesh as a fundamentalist state may bear serious limitations. The country has its strong root. The culture, Rabindranath, Nazrul, Jashimuddin are all important contributors in order to support her claim as a nation state. One can not just ignore this root for just few episodes dictated by few Islamic fundamentalist groups.
The Mahajote’s win may be explained by high expectations because of repeated political failures. The country’s leaders took hazardous task to grow. At home, wrong policies, and selfish policymakers practically ruined the immense prospect of the country. This time, the Jote has successfully reconnected politics to the young and to youthful idealism. Then they have also tried to give them hope from frustration. The rediscovery of the ideals of liberation war has once again invigorated the young population. Thanks to Sector commanders forum for playing such catalytic role. How the new government will fulfill the challenges is remains to be seen.
The agricultural sector is the biggest challenge to the new government. The role of international agencies and their policy advice to the food-deficit economies such as Bangladesh may have played a significant contributory role to the development of the last year’s crisis. Since the mid-1990s, countries that rely heavily on cereal production – particularly rice – were advised by the international agencies that a highly liquid, global market for cereals would be a healthy and desirable development for all. Accordingly, many countries such as Bangladesh got convinced that it would be safe to cover any shortfall in domestic output with purchases from the international market particularly from India, Myanmar, Thailand and Vietnam. As a result the rice and wheat sectors became less protected. Some countries burdened with high cost of production even dismantled export bans and reduced import tariffs. Some International agencies even argued that there is a glut of food production worldwide as evinced from the downward trend in the real price of rice and wheat in the world market and building of huge food stocks in neighbouring India. India too has misunderstood this issue. Her response to last year’s food crisis in Bangladesh was not at all satisfactory. The policy makers in this region now can think of integrating the whole issue of agriculture, starting from uniform implicit and explicit subsidies (output and input) to pricing of output. Any unilateral decision will distort other markets, encourage informal trade and thus impedes the welfare of the people in the region.
Obviously, the old prescriptions of the international agencies have not worked. There is a need to revisit the old models, analyses and policy recommendations. Fresh long-term forecasts of demand of food items, factoring in new uses and new consumption patterns would be needed to estimate if there is a supply-demand gap emerging in the longer term. Investments in agriculture would have to be revived to increase the local production and this should include investments needed for better water management. Finally, out-of-the-box thinking will be needed to come out with new policy recommendations like creation of regional buffer stocks to overcome volatility in production. Or else, it will be the poor in the poorest countries that will suffer the most due to food shortage in future.
For last ten years, the country has produced result in the manufacturing sector. But the potentials still to be explored. Much of the failures may be derived from partisan politics, and the governments in power. People are disappointed by previous governments.
The most dangerous is security threat and tension across borders. Then there are countries who have been working hard to exploit the situation. India can play a pragmatic role here. Take the case of manpower. The training of man power may have immediate impact in order to improve relationship. It appears that there is a strong relationship between investments in human capital and economic growth in the context of Bangladesh. The need to improve the quality of human resources is particularly important for Bangladesh, given its importance in the attraction of foreign direct investment. Although the developing world accounts for a steadily increasing share of world manufacturing (partly driven by lower wages and costs in that world), competitive advantage based on low wages is inherently a transitory phenomenon: sooner or later, developing countries such as Bangladesh will face the need to improve their skill as other lower cost producers emerge (for example, garments).
Many have argued that the level of education is below the performance required to integrate entrants to the labour force. According to them part of the low productivity levels are partly explained by ineffective education. A significant number of populations have been at the highest risk of low academic achievement. The fact that the poor have low levels of education in Bangladesh highlights the need to address educational issues.
There are many different types of public and private training programmes in Bangladesh in order to address issues such as low skill levels and high rate of unemployment rates among youth. In Bangladesh, ineffective training schemes impede an effective labour market for growth. This is due to limited labour market information systems and weak dialogue between public educational institutions and employers. Government programmes in particular have found it difficult to respond to the changing needs of the labour market, and to provide up-to-date equipment because of bureaucratic and fiscal pressures.
India can help Bangladesh in many ways such as developing English speaking population; increase the number of technical and high-tech skilled population. There is a dearth of semi skilled based educational institutes such as repairing cell phones, and Bajaj Scooters.
The prestigious Indian Institute of Technologies (IITs) may also be advised to open in Bangladesh based on public and private partnership. Indeed, this may help to restrict migration then the reduction of poverty . An economically strong democratic Bangladesh may stabilize South Asia. Needless to mention that availability educated workforce with low level of employability may create more problems for both India and Bangladesh.
It seems useful to mention here that the world as we know today will undergo major changes by the middle of this century. The countries that are unable or slow to respond will have to make room for others that can move quicker and innovation will be the key differentiating factor. In the long term, it may even be possible for some economies to survive only on the basis of their capital or technology, but labour alone may be unable to provide this sustenance. By bringing a large part of their population to the economic marketplace, India, Bangladesh and other South Asian nations will set free their innovation potential which has so far not found any route to reach the market. When this happens, the region will surely be a different place.
Understanding India's Growth
Everyone agrees that India has a long-term growth potential. The recent government data reveals an interesting insight. It shows that despite global melt down India can even grow by 7.1 per cent per annum. The problem is that the major contribution of India’s growth story is due to high labour productivity. That implies skilled workers immense contribution to this growth. The structure of imports also points to a very capital intensive production structure in India. But India urgently needs to create more jobs.
One such option would be to increase the supply of skilled workers and a prerequisite for this would be to raise the general educational standard. In general, the level is below the performance required to integrate entrants to the labour force. The fact that the poor have low levels of education in India highlights the need to address educational issues. Let us not forget that primary education generates the highest rates of return; secondary level has lower returns while the tertiary level has returns higher than that of the secondary level.
Experts argue that skill-biased technological change is responsible for increasing inequality within the top portions of the income distribution. Evidently, most of the growth in inequality between the highest and lowest earners is due to poor educational performance of the unskilled and their quality available in the market. At the household level, ample evidence reveals that the poor face credit constraints which prevent them from investing optimally in their children's education. But this is only part of the story.
On the supply side, the government is equally to be blamed. In the Indian context mostly the government educational institutions are responsible for providing quality education from basic to higher educational level. In general terms they are abysmally poor. At the school level, the difference between the government schools and the private ones is too glaring to be emphasised. Similarly, although there are private institutions offering tertiary education, the regulating bodies are all government controlled. Research and publications wise, the performance of the teachers are abysmally poor even in the leading engineering and management institutes. One will have to struggle hard to find an Indian educational institute among the top 250 in the world. In future the country must compete through the quality of her human capital, her innovation and her research and development. Sound educational institutions will be a basic premise for meeting the challenges of skill-biased technologies. If it is possible, India will definitely be a different place.
One such option would be to increase the supply of skilled workers and a prerequisite for this would be to raise the general educational standard. In general, the level is below the performance required to integrate entrants to the labour force. The fact that the poor have low levels of education in India highlights the need to address educational issues. Let us not forget that primary education generates the highest rates of return; secondary level has lower returns while the tertiary level has returns higher than that of the secondary level.
Experts argue that skill-biased technological change is responsible for increasing inequality within the top portions of the income distribution. Evidently, most of the growth in inequality between the highest and lowest earners is due to poor educational performance of the unskilled and their quality available in the market. At the household level, ample evidence reveals that the poor face credit constraints which prevent them from investing optimally in their children's education. But this is only part of the story.
On the supply side, the government is equally to be blamed. In the Indian context mostly the government educational institutions are responsible for providing quality education from basic to higher educational level. In general terms they are abysmally poor. At the school level, the difference between the government schools and the private ones is too glaring to be emphasised. Similarly, although there are private institutions offering tertiary education, the regulating bodies are all government controlled. Research and publications wise, the performance of the teachers are abysmally poor even in the leading engineering and management institutes. One will have to struggle hard to find an Indian educational institute among the top 250 in the world. In future the country must compete through the quality of her human capital, her innovation and her research and development. Sound educational institutions will be a basic premise for meeting the challenges of skill-biased technologies. If it is possible, India will definitely be a different place.
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