Monthly Archives: February 2006

Innovation at the bottom of the pyramid

A country’s greatest concern is how it will bridge the gap between the poor and the rich. First world countries spend millions of dollars to put in place support structures for the less fortunate in their societies. These are inadequate in most cases, and passable at the very best. This begs the question — if these programs are in such dire straits in the first world, then what can we expect for the newly industrialized countries in the imminent future?

While the second wave of Industrialization has been a boon for countries like India, Brazil and China, their leaders have failed to address the ever progressing gap between the rich and the poor. The stark rural-urban disjoint, is evident particularly when the benefits of technology and modernization fail to reach the poor, creating a feeling of disenchantment within the youth.

Governments are always under pressure to address this disparity, and in India the government has launched an ambitious project called the National Rural Employment Bill (NREGB). This scheme guarantees every rural household 100 days of labor at minimum wage. It will initially be granted to 200 of the poorest districts — to be extended to all the 600 districts in the country within five years. This scheme was devised by Belgian economist, Jean Dreze, who is currently with the Delhi School of Economics. While grandoise, the scheme has its fair share of disbelievers – and rightly so. There are genuine concerns that the huge cost of the scheme might not be affordable for the country and could lead to a sharp rise in both interest rates and the nation’s ficial deficit. It must also be noted that the Indian National Congress Party and its predecessors have a history of launching schemes riddled with corruption that have siphoned off millions from the National treasury with little or no progress to show … case and point – Garibi Hatao Scheme under Indira Gandhi.

A more plausible solution would come from the Industry. Thinkers like Professor C.K. Prahlad (author of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits) talk about hidden opportunities that lie at the bottom of the pyramid – indicating people below the poverty line. Prahlad believes that philanthropy is not the way to get rid of poverty and that there is a need to enable the world’s poor to get them out of their poor economic state. He also talks about the role of MNCs, in identifying markets, which lie at the bottom of the pyramid. If a combined effort is made, we might be able to realise his dream to eradicate poverty.

Due to their extremely limited resources, every purchase has to be balanced against the most basic daily needs of food, clothing, clean water, and medicines. Professor Prahlad points out, “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.”

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Are generic drug manufacturers the answer to the next global pandemic?

Are intellectual property rights still considered unassailable when such disparate measures are taken to fight ongoing pandemics like AIDS, SARS or the recent advent of bird flu?

Recently Cipla, an Indian generic drug maker, announced that they will launch a generic version of the bird flu drug, Oseltamivir in the domestic market this month. The move to launch the product follows the company’s abortive attempt to get a license for the product from Roche and Gilead, which have patents on the drug in the regulated market. Cipla is best-known for manufacturing cheap anti-AIDS drugs.

Cipla has managed to circumvent patents restrictions on these drugs due to a previous patent law in India that protected manufacturing processes, but not products — an Indian company was free to reverse engineer any drug so long as it used an unpatented process.

Case & Point:

There has been a visible conflict globally over AIDS drugs in Africa and Intellectual property rights enforced by big Pharma. Due to the higher drug costs for public health programs across Africa, many states are dealing with acute public health crises. This is where generic drug manufacturers like Cipla have played a role to bridge the gap.

With Cipla drugs, the cost of treating an AIDS patient has been reduced from $12,000 to $300 per year. The customary treatment of AIDS consists of a cocktail of three drugs. Cipla produced an all-in-one pill called Lamivudine which contains all three substances, something difficult elsewhere because the three patents are held by different companies.

The drug is widely used all across Africa and the third world.

Are we killing off an effective engine for quick and easy replication of drugs that would enable us to control recent global outbreaks such as SARS and birdflu? There are epidemics such as the west nile virus, AIDS and Polio that still need to be eradicated. These generic companies have invested a large number of resources in understanding local markets and have built complex supply chains around them. They have also invested millions in third world research centers employing thousands of bright minds. Will these valuable resources be lost forever?

Link : Patent regime? Not the end of the road

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Ever wordered how "blizzard conditions with heavy snow and blowing" looks like?

Times Square – New York, NY
Sunday, Feb 12th, 2006

Sunday Low: 17°F/-8°C
Blizzard conditions
with heavy snow
and blowing

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Crowded Skies – A statistical case for privatization of Indian Airports

On February 1st, 2006 the Indian Government approved the privatization plans for the Delhi and Mumbai airports after years of lip service by numerous governments in power. GMR Industries and Frankfurt airport operator Fraport will modernise Delhi airport while the GVK group and its South African partner has won Mumbai. They will be offered 74% stakes in the airports while the state-controlled Airports Authority of India will retain a 26% stake. The plan is bitterly opposed by trade unions and the government’s communist allies.

The Indian airports are in a critical state with poor infrastructure that is unable to cope with the projected growth. No Indian airports have more than a single runaway and are unable to handle the new generation of civilian aircrafts such as the wide-bodied A380. Ground facilities are insufficient to process the current passenger volume. Air Traffic Control is unable to cope with the traffic and delays are common place. To make things worse India is facing its first shortage of pilots or traffic controllers.

To harness how important the privatization of Indian airports was, a Rediff article, “Indian airports grounded by poor infrastructure” carries some astounding numbers. Here is a synopsis:

Human traffic that passed through the Indian Airports:
  • 2004-2005 @ 60 million (a growth of 21% over 2003-04)
  • April-October 2005 traffic grew another 19% i.e. 38.5 million check-ins.
  • Analysts expect growth at a CARG of 25% over the next five years.
    • Number of Airlines operating Daily:

    • Indian (was Indian Airlines) operates over 300 daily flights.
    • Even Air India operates over 200 flights per week from Indian cities
    • Jet operates 290 and its new acquisition, Sahara, another 250 approx.
    • Kingfisher has approx. 100 daily flights and
    • Air Deccan has 200 while
    • SpiceJet has around 40.
    • (Air India Express, the low-cost subsidiary, operates another 38 flights/week)
      • New Aircraft orders in 2005:

      • Air India put down $8 billion on 68 new Boeings.
      • Indian has ordered 43 Airbuses.
      • Air Deccan will expand to 30 aircraft
      • SpiceJet plans to induct 20 new Boeing 737-800s.
      • Kingfisher has announced the purchase of 30 Airbus A320s and 20 ATR 72-500s.
        • In addition, half-a-dozen airline IPOs are in the pipeline for 2006-07 and Indian and Air India could finally see disinvestment as well.

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          Why pumping water is child’s play?

          This is a fantastic story about how one eager company in South Africa , Roundabout Outdoors is harnessing the playful energy of children to power a borehole pump. What is interesting is who is picking up the tab.. an Aids awareness organization.. 2 problems tackled.

          Source: BBC NEWS World Africa “Why pumping water is child’s play? “

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