Advantage, Poor Economies!

Sometimes not being too developed is an advantage!

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As the cliché goes, “Change is the only constant”! Human race with smarter brain and use of Thumbs of both hands has leaped frogged ahead of other species. From stone age tools, to the wheel, to metals, list is endless. During any and every change there has been resistance, there has been reluctance to accept new things. Flat earth theory is the classic case of non-acceptance of the progress of science. But in the end, all the new changes became routine.

During last 50 years of previous century and 17 years of current century, the changes and innovations have happened at an breath taking speed. Some things kept on becoming more efficient and improved tremendously. Some products, became obsolete even before their potential could be realized. Classic example is Fax. Before we started using fax in a big way other methods of communications came into use, PC became a mass product and over period fax machines simply disappeared. Some products which never existed before suddenly became household names, like iPod.

Computer proliferation has been the most important change that happened during 80’s and 90’s. Advent of computers, first as big as a room, then came desk top machines, followed by laptops, tablets and smart phones. This sequence is important. Computing and storage capacities went on increasing so rapidly that current smart phone capabilities are far greater than original desk top machines. One of the most important effect of these changes is to speed up discoveries in various fields, improve diagnostics in medical field due to better imaging techniques and faster results of collection and analysis of data.

I have only touched upon a couple of innovations and technological changes, but I always wonder how the general population of the world will handle these changes. One important thing about some of these changes is that they are seamless and are accessible without the hindrance of international borders. This reminds me of a Hindi song Panchi Nadiya, Pawan ke zoke, Koi sarhad na inhe roke! Birds, Rivers, the Breeze fly and flow at will and no border can stop them. Internet is one such thing like the birds and rivers and breeze! Except in countries like China, who go by their own laws of freedom. Another unfortunate seamless development is terrorism but that is a subject by itself.

How is general population able to handle these changes? In developed countries where literacy levels and education levels are higher, you might think that they handle it the best. But we already know that India is leading the usage of Cell phones, more than 80% of India’s population has biometric identification, which is practically unbreakable. High % of Kenyans use cell phones to make their financial transactions. I am quite sure many more Indians can do it but they avoid doing formal transactions so that they can cheat on taxes. I do not know the data about how many Indians have started using Bitcoin crypto currency! This switch over will be fast because it is currency which is non-traceable, seamless internationally and illegal in India. This will help people keen on dabbling into “black money”; at least currently it is better than keeping money in Cayman’s island!

How can new technologies change the world order? This may not happen overnight, but it can happen. Countries like US, England, Germany and many other are money rich countries, but countries like India are data rich. In 70’s in the last century when gulf countries realized the importance of oil, in a decade or so they became rich countries because they exploited the oil! Mukesh Ambani has recently said that Data is new Oil! What is the meaning of this statement? It means that the country which garners and manages the data well, will become rich fast. China is both rich in money terms and is data rich, so they will probably gallop over the others.

The Rich world already had systems and with new technologies they have improved on their systems. But in countries like India a large % of people who are not in the system, are taken into formal system, thanks to Aadhar which has biometric authentication. This has enabled India to create completely new systems. This will enable such people to access loans, and funds to which they never had any access. These systems can give poor, subsidy in Electricity bills and Fertilizers, directly. Before new systems there was a big leakage of funds and benefits never reached the poor. Systems are being designed for day to day use where biometric authentication is the only thing that is checked e g vending machines. Using this authentication, financial transactions can be completed. In India power deficit has been historical. Recently, a solar power plant for 800 Megawatt was commissioned in six months in Andhra! Five thousand people were employed on this project. One more example of new technology doing quickly, what old and polluting technology was taking years to do. Those who can afford, should put a solar plant on their own rooftop, for home use. What this does is 30/35% transmission loss is gone because there is no transmission!

Will the “uneducated un included” population be able to handle these rapid technology changes? If cell proliferation is an indication, then things look good! Cell phone is going to be the tool for all so it is upto the app developers and various agencies to create business processes in such a way that life becomes easier and easier; biometric authentication is already there! Before signing off let me share one more example of new technology and thought process. There is a Dam near Pune with a very large reservoir! The is plan, is to cover 4600 acres of water with floating solar panels to generate 1000-Megawatt power! Do you know what the bonus is going to be? Great saving of water which is lost due to sublimation! Great thoughts and new technology are simply going to change things for “Have Nots”!

Age is just a number!

Use your senior age to advantage!

Every society has its way of handling age and old people. What does it depend on? Relationships, money, closeness in the family, decide many aspects in life. Of course age is not the only factor, along with age comes the factor of health! If these two combine badly, the situation becomes dicey! In the current scenario where migration is the name of the game, things can be even more difficult; it is not migration to another country but it can be migration to a city from village or to another city, for work! Old are of course left behind!

My observation is that in western society, health permitting, senior citizens do a lot of things independently, without giving too much thought about age. This is probably because many generations have had a large number of senior citizens and are used to handle their own things, financially and otherwise!

In the generation of my grandparents, there was hardly any migration and most of the family continued to live together, many a times in the same house. Household requirements and individual requirements were very low and people survived with low incomes. At a later stage in my grand parents case, I think my father and uncles used to give additional support to them. It was always discussed in those days and even today, that people from that generation were really strong! They had to be! During young age of my grandparents, the life expectancy was so low, that those who were really strong, survived. Large number of people would die of influenza, plague and so on. There were no modern medicines or diagnostics. You catch the dreaded illness and you are gone!

But in today’s times, with Modern medicines, general improved health awareness, you see a lot of senior citizens around, with reasonably good health and in some cases wealth too! That’s a great combination if used properly. You have everything and diminished family responsibilities. So why not use the situation fruitfully? This is right time to start using ones bucket list! It could be books, travel, watching sports events, music events or whatever you have not been able to do in younger age.

In India we consider the age around 70 as old. Old enough to be reading Scriptures, living a contented life, interacting with grandchildren if they are around, maybe go to Mandirs and so on, in short doing nothing! This thought process is changing albeit slowly. Many of my friends in this age group have  become globe trotters, travelling with spouses and certain cases alone. In Western countries thought process about old age is  pretty different, the oldies are quite independent. We as a society should try and emulate good aspects of western thought process.

In last two years on different excursions we met a lady who was 99, travelling alone! Recently we met a 87 year old person again travelling alone. He has travelled to 99 nations in the world. Mind you, the examples I am giving here are all westerners. We have seen people who needed wheel chairs, one young man needed 100% Oxygen support. Yes, in foreign countries the facilities for physically challenged people are superb. That helps but it is the will to do it, will to travel, to explore through the physical challenge. Our group in both cases was predominantly of westerners!

In India our thought process is not very open to such thinking because for the first time, in our history, a large number of fitter & willing senior citizens are around. There is no history of independent senior citizens wandering about. We met an Indian couple, in early fifties, from Mumbai, at Matterhorn in Switzerland; they were kind enough to help us with some photos. While parting, the gentleman made a remark, “Sir, it is creditable that you are doing this journey at your age!” He had a valid point, not many Indians of our age travel internationally in mountains, independently. In the group in which we travelled, we were in middle range of the age group, many were 75 plus!

In general we take our age very seriously and think in terms of “Vanaprasthashrama” (fourth and final stage of life cycle)! Of course we have to be careful that when we travel we do not have any health issues! When we were travelling my wife Jaya had a minor foot injury. Our tour manager suggested, in good faith, that we should avoid mountains so that there is no mishap. But we were careful, reasonably confident ( of course not over confident) and did most of the things that were possible on the tour. We enjoyed the ride on the open deck of double decker cable car at Stanserhorn in Switzerland! Was the weather cold!

DoubleDeckerCableCar

Another thing that happens with the age is that we become a little inflexible with our eating habits. But we always followed the dictum ” Be like Romans when in Rome”! So we did have Pizzas and Pastas and Salads when we were Italy and enjoyed them. Of course “Kartoffelsalat” while we were in Germany! Did we have lovely wines when were in wine country? Of course we did!

What we can do post retirement is dependent on our mind set and openness to try new untried things. Don’t forget that many westerners do come to India where systems, food, weather are quite different for them. They can do it because of the flexibility that they show. You must be wondering why I am giving examples of western world. This is just to explain how differently old age is treated by westerners and what are the joys of this different treatment.

While walking around in Lucern, we had 76 years old Jones from Montreal for company. We saw one Indian restaurant and she said, ” Since you and Jaya are with me, I would like to try Indian food!” We went there and enjoyed the really pleasant food, even by our standards! Only thing I did not manage is to make Jones eat raw onion, the way we eat it! I had also offered to show her how we eat with our fingers but at her request we passed it too! I am sure we also will become more adventurous and try different things! Happy globe trotting folks!

 

 

Electric cars, are they round the corner?

Definition of inflection point: a point on a curve that separates an arc concave upward from one concave downward and vice versa. The term inflection point was first used by Andy Grove in his book “Only the Paranoids Survive”. Inflection point can be there in anybody’s life on in business cycle of industry. It indicates the total change in scenario or make and break situation. The diagram showing point of inflexion.

 Inflexion point

I visualize a major point of inflexion in automobile industry in near future. There are different views floating regarding when the Electric Cars will be mass produced. The year mentioned fairly regularly is 2030! That’s not really far! Why this is going to happen and whether it will happen at all will be based on many factors. Currently volume of Electric cars manufactured world over is not significant. But Nissan, BMW, Ford, GM, Mahindra in a small way and of course Tesla are already making electric cars. I have heard that Toyota plans to come up with a full electric car by 2019.

 2016electric cars predictiongraph

This is the forecast sale of electric cars as percentage of total car sales, for the year 2016 but I could not get the real figures. Japan at 9.7% is highest in the number of total cars produced and China at 0.9% is the lowest %. France, Great Britain, Germany, USA, South Korea, Spain are there in between.

 What will give the boost? What factors are going to push this production? When will the momentum gather for switch to mass production? When will the point of inflexion be reached? Main factors considered in usage of automobiles are its price, fuel cost, car driving  range, parts cost and main is the cost of ownership. Besides this battery charging infrastructure is going to be the most important aspect that will make or break this change.

 Price factor for electric cars appears to be in reasonable control even without mass production. In the cost of electric cars “Engine & drive train” needs be brought down; all other things remain same. When Tesla started producing cars, people looked at it as Elon Musk’s fancy! Tesla is working like a start-up but it is somehow managing to survive financially. Now they are also coming up with an affordable sedan. Slowly big giants like BMW, GM and others have woken up. Initial experiment started with Toyota’s Prius hybrid. Thinking was to just increase the fuel efficiency of existing car system and Prius hybrid was the first successful attempt. But it was definitely a minor change in thinking and not the game changer like fully Electric car. As per current thinking even  in India, Government has increased the Tax on hybrids. When asked, the minister said, “When Electric cars is the future why bother about hybrids!” Electric cars will of course need Government support by way of lower taxes to make them attractive for buyers. Government support will also be needed for battery charging infrastructure.

 Second factor is the cost of fuel. With many shocks offered by Petroleum politics, world has been looking to go away from fossil fuels. Plus the world has woken up to climate change and is aggressively looking to control pollution. Cars are known to be major pollutants. Stringent control is being sought on exhausts from cars. But this will happen only in newer cars, old polluting cars cannot be wished away. Volvo has made a statement that the cost of manufacturing car systems to match pollution norms in 2022/23 will be so high that they will stop making diesel engines. To overcome pollution issue, Germany has declared that by 2030 only electric cars will be manufactured in Germany. To achieve this target they will really have to work hard but German car makers have the technology, financial clout, will and wherewithal  to achieve this target; they are working very aggressively. Best non-polluting fuel obviously is electricity. But cost of producing electricity was a major factor hindering its usage in cars using battery banks and of course the cost of batteries. Solar and wind energy seem to be galloping ahead of other sources to make electricity cheap. Classic example is Germany. On a day in 2016, 85% of electricity produced in Germany, was from non-conventional methods.

https://energytransition.org/2016/05/germany-nearly-reached-100-percent-renewable-power-on-sunday/

With abundance of cheap electricity, on that day the rates of electricity went in negative in tendering process! Recently, California produced 67% of electricity, on a particular day,  by non-conventional methods causing serious disruption in electricity pricing mechanism! World over including India, Solar and other non-conventional methods are very aggressively pursued. By 2030 it looks like world will easily achieve the goal of cheap fuel in the form of electricity!

Currently when we travel by car, we do not think how much distance we are going to travel. This is because fuel infrastructure is fully established world over. Whenever needed, we just refuel and move ahead. This is not going to be so easy, at least today, in electric cars. There are two major points. First is charging stations and second is charging time. Both need to be vastly improved. Charging time is evolution of technology, in cell phones rapid charging technology is already available so maybe it’s a matter of time when we get this in car battery charging. Charging infra of course has to come up but when number of electric cars increase, the infra will come up. The range per charge is also the matter of technology so hopefully it will rapidly increase. Similar to what we do today, while driving long distance, we should be able to stop for coffee and wash room break and get batteries recharged. Lo we are on the way! 2030 very much possible. But my take is that this will happen faster in Europe, Japan & Korea because such things are national policies and are easier to implement  in these areas because of the smaller size of the nations plus most of European nations are developed nations.  In geographically large countries like US, Canada and China plus India, this change may happen region wise or state wise starting with highways. City limits will adopt faster as people can charge their cars in their own homes. 

 Replacement parts and cost of ownership are combination factors. In the electric cars, drive train, exhaust systems as we know them today, will simply be not there being replaced by battery packs, motors & drives. Less number of mechanical parts is going to definitely reduce the repairs and servicing cost. This factor has nothing to do with 2030. As the cost of ownership comes down, more people will be interested in driving electric cars.

 Another major change is going to be the nature automotive components industry. When major systems like drive trains & exhaust system are not needed, current manufacturers will find in a drastic reduction in parts needed by industry; over a period these will be only needed in old cars. With a mandate to supply parts for ten years, 2040 will be the last straw on the back of the Camel for this industry assuming by 2030 electric cars will be used in large numbers. How will current component manufacturers of these components handle change? Will they start making parts needed for electric cars? Do they have the technology? Only time can tell? How will Bosch’s, Conti’s, Denso’s and Valeo’s of this world handle the situation only time can tell. I am sharing one important information about change that has already happened. Nvidia Graphics, www.nvidia.com  producing chips and cards with their GPU technology are already vendors for Toyota, Mercedes, Audi, Honda, BMW, Volvo. This is because of rapid increase in usage of onboard computers to perform various functions including self-driving cars. Five years back, I am not sure if Nvidia name was much known in automotive world! Point of inflection? Yes my friends this is the point of inflection and in this business jungle, snipers in the form of technology are hiding! You never know when you will get your bullet! Yes, my conclusion,” ELECTRIC CARS ARE COMING IN A BIG WAY BY 2030”!

 

 

 

I am getting a Toyota Prius!

One of the most important aspect of human civilization is that nobody can stop the technological advancements. Technology, the right one, is simply unstoppable. Humans do not change and they most of the time feel that so and so technology cannot become popular. There are very few visionaries who can guess, predict what can happen after a couple of decades. Initially when any technology comes the cost of its implementation as well as usage is always very high. This cost does come down with increased volume.

Let us consider the scenario in solar energy globally. Germany recently on a particular day produced, 85% of its total electricity produced, by Solar. The energy market in Germany runs like a trade market and the rate at which power is bought by distribution companies is based on demand and supply. On that particular day the rate went below zero! California on one day recently produced 67% of its electricity by Solar. US being a very large country will take a long time to reach Germany’s level as a country but it will happen in pockets. India & China are galloping fast towards solar energy in a big way.

If we think about steam engines and trains, initially people were just curious and felt that trains cannot compete with carts pulled by animals. Once the fear in people’s mind reduced, time of travel decreased and more and more people started travelling in trains and rest as they say is history. My first travel to USA was in 1981 and I had paid US $ 1076/ for return journey. Even today we pay hardly more than that in Dollar terms, for return ticket to USA. Why this happened? Because of safer, faster, larger airplanes increased the volume.

Cell phone is another classic example of technology that made it a disruptive device! When I first got my cell in late 90’s the cell phone was quite heavy, almost ugly, and it cost Rs.16/ minute to receive and make calls! In twenty years Cell phones have become sleek, they are much more powerful than computers specs ten years ago! Ten years ago GB was a word very rarely used even in computers. On top of that making calls is now free! Technologically in 20 years cell phones have gone places! Who would have thought of these changes? In the initial phase cell phone was the so called rich person’s toy. The beauty is that land line telephones have been there for more than 100 years doing same basic work that cell phones do, talking to each other. But other than becoming sleeker, land line phones did not change much in technology. Hence the landline phone population is on the wane world over.

Next classic battle that I visualize is between IC engine cars and Electric/Hybrid cars. The usual naysayers are saying that the current car companies are so powerful that they will just not allow this to happen. What are the parameters that will come into picture? Current volume of Electric/Hybrid cars is miniscule and their yearly volumes are nothing to write home about. So what is it that is needed for the picture to reverse, if it does! Fuel costs is one important parameter. Petrol/Diesel costs have come down from highs of US$ 150/ per barrel and have stabilized around US $50/. The original cartel led by Arab countries is finding it difficult to keep high rates due to new people coming in, huge American & Canadian reserves which were not known even ten years back, have suddenly become available. Their cost of production of extracting oil is also coming down. The fear of Petroleum products simply getting exhausted from the world has gone. So fuel cost may not be THE thing that will trouble current cars. But on the other hand, the cost of producing electricity is definitely going down fast. As more and more countries including India go strongly after solar energy, this cost will come down further. The countries which have lot sunlight round the year can become major players in producing next “Petroleum” for cars. Along with this wind energy is also playing a major role. One thing is for sure compared to petroleum products “Sunlight & Wind” are definitely never going to get exhausted. What all this will also do is pollution levels caused by burning Petroleum products will also come down. On top of this when more and more Electric/Hybrid cars get into use pollution levels will further go down.

Largest component of Electric/Hybrid cars is battery pack. Tesla is already building a Giga battery factory in Nevada where they will be able produce battery packs for five hundred thousand cars a year, at naturally very low cost. Already, Tesla is talking of producing cars that will be only slightly more expensive than sedans. Another limitation currently is the distance the car can travel with one charge. In cell phones  already fast charging systems have come, so I am sure it will happen in Electric cars too! So maybe when you have coffee break or wash room break, you can recharge your batteries. Once these cars are reasonably priced people may use such cars the way we use scooters in India, to travel smaller distances. For last hundred years there has been not much improvement in battery storage technology, compared to other fields and same is the case with IC engine cars. I am sure in batteries the break through is just round the corner! If automotive technology had improved as much as electronics, a car would have travelled round the globe in one liter of fuel!

If we summarize this battle, cost of production of fuel (electricity) to charge the electric cars is going down, cost of battery packs is going down ( it is like engine price going down), battery pack capacity will slowly start going up like some Tesla cars go beyond 350 km per charge, pollution improvement is a bonus. On the other side Volvo has already declared that they will not produce diesel cars from 2023 because cost of using technology for pollution compliance will go up exponentially. Volkswagen has already claimed that they will not produce IC engine cars beyond 2030. In India Suzuki & Toyota have joined hands to manufacture hybrid cars for Indian market. Suzuki and Toshiba have joined hands in India to build Lithium Ion battery mega plant. In USA GM and Ford also have big plans for electric cars. BMW i3 model electric car was quite visible when I last travelled to USA. Along with that a lot work is being done by Google and Apple in driverless car. I feel that controlling an electric car with computers will be much easier than IC engine cars! Will humanity be able to stop Electric/Hybrid car technology? Only time will tell. But in the end right technology will win!

So my next car is definitely going to be a Toyota Hybrid Prius! There is small issue of money in the bank but I will generously accept it, if someone wants to gift me a Prius! I will put big donor name sticker on the car! Happy (electric) motoring!