India’s Kaizen IN SPACE
The industry, unlike governments, seldom uses the word reforms. Improvement in industrial processes has different definitions. The meticulous Japanese put impetus on Kaizen (continuous improvement) and Hansei (self-reflection). The assiduous Americans emphasise Six Sigma and Lean Six Sigma (for reducing or eliminating errors). Prime Minister Narendra Modi and his administration’s new ‘space sector reforms’ fit within these four industry improvement concepts wholly.
The Modi Administration and India’s nascent space startup sector are the most spirited about the new space reforms, more than the fastidious Indian Space Research Organisation (ISRO) and the relatively impassive larger private corporations and conglomerates. The fussiness in some quarters of ISRO stems from the painstaking nature of reforms, particularly for a successful government organisation. The private sector is impassive because it has yet to articulate its game plan on the new level playing field, as some have learned only to be ISRO’s diligent vendors. The apt spiritedness deserves a couple of paragraphs.
There has arguably been no more opportune moment to initiate reform within India’s space sector. The global order is currently experiencing instability owing to the COVID-19 pandemic and its associated ripple effects. Beijing’s growing assertiveness along the Line of Actual Control, in the Sea of Japan, and the South China Sea is significantly undermining its economic forecasts. Should Beijing’s manufacturing monopoly face a sudden disruption, particularly at this juncture when the world stands on the brink of the Fourth Industrial Revolution, nations such as the United States, Japan, and India are likely to reap considerable benefits, as they will be able to expedite the development and production of Industry 4.0 technologies.
The geoeconomic and geopolitical isolation that Beijing has drawn itself into presents immense opportunities for India. Large sections of the Indian economy are bullish despite the short-term COVID-19-caused slowdown. With the new space sector reforms, the Modi Administration has opened an uncharted economic territory with greener pastures. India’s private sector has been given the latitude to innovate cutting-edge ‘Industry 4.0 space technologies’, manufacture them for ISRO and also make their mark in the global space economy. ISRO, on the other hand, has been encouraged to focus on R&D for India’s spectacular space projects such as Chandrayaan-3, Mangalyaan-2, Gaganyaan, and the Indian Space Station, all scheduled for this decade.
In 2019, the Prime Minister’s Office (PMO) established New Space India Limited, a public-sector enterprise, to trade ISRO’s spin-off technologies, launch services, and satellite solutions in both domestic and international markets through technology transfer. However, the PMO likely recognised that merely establishing this supply-side entity outside of ISRO was insufficient. India is also experiencing a surge in technology startups and micro, small, and medium enterprises (MSMEs), propelled by policies introduced under the Startup India and Make in India initiatives. Currently, space startups are in the early stages of private investment, including preliminary, Series A, and pre-Series A funding rounds, demonstrating significant potential in both innovation and manufacturing, comparable to ISRO. Nevertheless, these startups have substantial development ahead. Due to limited funding, they seek access to the costly, cutting-edge testing facilities developed and maintained by ISRO, which currently remains solely accessible to ISRO. The PMO’s decision, announced on 24th June 2020, to establish the Indian National Space Promotion and Authorization Centre (IN-SPACe) has enabled MSMEs and startups to access ISRO’s infrastructure, creating opportunities for demand-side growth. The community of space startups and MSMES is expected to expand further in the future.
ISRO, over the years, has cultivated many diligent vendors from the heavy machinery, electronics, telecommunications, materials, and speciality chemicals industries. The ISRO-vendor relations grew in an era when the gestation times for space technology were longer. Neither of them was geared for fast innovation, nor have they felt the need for rapid differentiation. Their speed-to-market was easy-breezy, and profitability was not a priority. The ISRO-vendor combine was indeed efficient, as is often reiterated in the media, but when compared to less performing government liaisons. After the recent space sector reforms, there is no stopping India’s large technology corporations and conglomerates from starting space R&D divisions or investing in promising startups and MSMEs under their wings. But are they ready?
India Inc. is yet to use a new set of spectacles to view the space industry. They should firstly realize that the space industry is not merely about satellites and rockets. There is immense potential to enter the space industry through the information technology, automobile, speciality chemicals, electronics, banking and insurance, and aerospace verticals, in which they have already excelled. For instance, Tata Motors and Mahindra & Mahindra have the wherewithal to extrapolate efforts from their autonomous-vehicle projects to build rovers, radars, lidars, and vision-pattern recognition, as Audi, Toyota, Suzuki, and Mercedes are doing for surface transportation on the Moon and Mars. Jio, Airtel and Idea can accrue means to build the sixth-generation telecommunications network spanning between the Earth, Moon and Mars. The Indian electronics industry can innovate and manufacture space-grade materials and semiconductors, like ISRO’s new navigation-technology partner, Qualcomm, after the government’s recent Production Linked Incentives for assembly, testing, marking, and packaging (ATMP) units. Likewise, aerospace companies like Hindustan Aeronautics or Tata-Boeing can extrapolate their prowess in building aircraft to build the space station, spacecraft fairings, and fuselages of spaceplanes. These are just the tip of an iceberg of immense space business opportunities.
India is moving towards a purple patch of innovation. It has been filing for intellectual property in certain domains at a faster pace than ever. These successes come only with a strong competitive drive for speed-to-market. This attribute is a perfect match to what has been missing in India’s space sector to date. With these factors working in India’s favour, it now depends entirely on the large corporations to assimilate and invest in Indian space startups. If they do not take them under their wings, the startups will progress to Series B and C funding and be picked up by overseas investors, causing attrition of domestic innovation.
The private sector has another reason to be upbeat as there is an entirely new and independent space agency rising unconnectedly in the backdrop – the defence ministry’s Defence Space Agency (DSA). The DSA, being a 21st-century military space agency, will be outfitted to work with India’s private space sector. The strong private sector representation in the Mission Shakti project has already set a precedent. The two space agencies, one Yin and the other Yang, will foster sustained business for the private space sector and maintain progress and order in India’s space innovation and manufacturing ecosystem.
India’s economic development in the 21st century is fundamentally linked to advancements in outer space. The government, recognising this reality – Hansei – has implemented essential reforms - Kaizen. It is imperative that the private sector promptly adopts these space sector reforms. Such actions are in India’s best interests.
