Economic Growth

So, I read the news about India's GDP growth other day. Headlines about how it has slowed in recent years from 8-9% two years back to 5-6% in 2011-12. I wondered what difference does it make if growth reduces by few digits. Why do we care so much about this number?. The politicians talk about it, the bankers talk about it. What is the fuss about?
To find out let's look at two cases. One is the case of low growth rate of 2% and another with high growth rate of 6%. Let's assume people in both the countries make 1000 rupees initially.

If we use the simple high school compound interest formula we'll end up with something like this :-

YEAR                 2%                  6%
   0                  1000                1000
   1                  1020                1060
   10                1219                1791
   35                2000                7686
   100              7245              339,302


After first year, the difference between the per capita income is not much. 40 dollar per person that is not a huge difference. If we go ahead 10 years from now, the people in the second country are almost 50% better off than the first one. Similarly during 35 years period, the people in the second country are almost 4 times better off  than the first one. This means the growth is exponential.  And to simplify things we'll use a new formula called "rule of 72". It explains what we can actually deduct from these numbers.

Rule of 72  - "Divide 72 by the growth rate and it tells you (approximate) time for GDP to DOUBLE"


Let's suppose our growth rate is 2%. We get 72/2 = 36. Which means it'll take about 36 years for everybody's income to double. 
What if I had 6% growth rate. 72/6 =  12. Which means it'll take 12 years to double. Both the arguments are also clear from the table above.
The overall conclusion is, if we go from 2% to just 6% growth rate. The country's GDP will be 8 times to that of initial value during the same period in which the country with 2% growth rate doubles itself. That is a HUGE difference!.

And that is why people focus so much on growth rates. Since the growth is exponential a slight difference turns out to be huge in the long run.

Why Do Some Countries Not Grow?

I'm reading fascinating new book called "Why Nations Fail" written by the economist Daron Acemoglu and the Harvard political scientist James A. Robinso. It argues that the key differentiator between countries is “institutions.” Nations thrive when they develop “inclusive” political and economic institutions, and they fail when those institutions concentrate power and opportunity in the hands of only a few. Growth requires a strong central government to protect capital and investment but that government cannot be controlled by a select few. Too few people will extract money from the economy thereby lowering investments in innovation and capital.


                        "Growth requires creative destruction"


 It is true that when one market gets wiped out another emerges. The advent of Tractor replaced horses in  agriculture. Cd's replaced cassette tapes. In more recent times, the internet has acted as a catalyst for creative destruction. The internet has allowed businesses to compete in markets outside of their geographic location, reach more consumers, create efficiencies and cut costs in manual processes as well as pioneer new techniques for doing business.
                         Sustained economic growth requires innovation and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics.
                    "Unless a country makes the transition to an economy based on creative destruction, its growth will not last," argues the author.
                     Once I finish the book, I'll look into what it means for India. Why growth rate has fallen in recent times and how it'll affect our future.

                  

What makes Apple Great?

                   "Do you want to sell sugar water for the rest of your life or come with me and change the world?"

 Said the young Steve Jobs when he convinced Pepsi’s CEO John Sculley to join Apple. Sculley immediately left Pepsi and joined a company which was just 4 years old and whose future was hanging with a thread. Today, the same company is one of the largest and the most valuable technology firm in the world. What sets Apple apart? How does apple have such incredible products? What can we learn from it’s founder? Here I listed 5 reasons that makes Apple Successful.

1)    Jobs loves beautiful products. He’s always fascinated with the look, the feel and the simplicity of a device. No ugly lines or holes going down on it. Every creation of his is close to perfection. Even the chip and the transistors inside are smartly placed so that they work exactly how they’re intended to work. Everything had to be beautifully placed and done even if it wasn’t going to be seen by most people.

“When I wasn’t sure what the word charisma meant, I met Steve Jobs and then I knew” – Larry Teslor, Computer Scientist

2)     Jobs always look at things from the perspective of a consumer. The belief is to deliver the best user experience possible. Forget Specs, forget numbers just focus on making the device work easily and flawlessly. You don’t need  a manual to figure out how it works, it just works! . When Samsung, HP or any other company sell it’s product they confuse the people with a whole lot of Specs and Data which doesn’t even make sense to most of them.  Apple’s approach is different. Innovative advertising combined with great product unveiling and keynotes results in better sales.  

3)  The reason Macintosh was so successful was that the people working on it consisted of musicians, poets, artists, zoologists and historians who also happen to be the best computer scientists in the world.  Apple is not really a technology company, it's a design company. If you look at the iPod, you will see that many of the technologies that are in the iPod are ones that Apple bought from other people and put together. When Apple created Macintosh, all the ideas came out of Xerox Alto. Even the iPods derives some of it’s techinology from Sony Walkman players

      4)  Jobs has an ability to discover products, not invent them. Mp3 players and smartphones did exist before iPods and iPhones but the difference was they were clunky, ugly and hard to operate. He made them easier and friendlier to use. iPod still dominates the digital music player market with more than 70% market share. 

5)   Apple Stores  - Part of which makes Apple successful is the 100 retail stores spread around the world. Apple stores are always packed. You can go to the Sony center — There’s nobody there. You can go into the Nokia store, There’s nobody there. Glass walls, genius bars and the fit and finish of the store makes the buying experience a whole lot better.

Why Chrome OS sounds like a bad idea today.

On 7^th July 2009, Google announced a bold move to enter into the OS market and take it head on with Microsoft. Back then, the popularity of Netbooks was on peak and sales were  high. Entering into the OS market aimed at Netbooks was a usual move for the company.  The idea was simple, Design a light OS which is tightly integrated with the Google’s services and search, have everything in cloud and make that plastic device a mere window to the user’s data and the Web. It’s been 2 years and a lot has changed since then. Apple launched iPad inventing a whole new category of Tablets. Tablet sales have already surpassed to that of Netbooks  and it seems like they’re on their verge of extinction. When people talk about buying a mobile internet device, Tablet is there first preference. Around  80 tablets were launched in the recent Consumer Electronics Show at Las Vegas and 50 more are planned this year. Compare to that of Netbooks, no single Electronics manufacturer is planning to launch another Netbook in the market.  It seems like the innovation in the Netbook market has began to settle. You get almost the same specifications as a year before.   

                                                                      Coming back to Chrome OS.  After using it for 3 continuous days, the initial impressions were not good. It is no different than a Chrome browser sitting on top of a Hollow operating system. I’d have used goodOS if I wanted something like that. With internet connectivity as slow as Indian Railway, the OS proved to be useless. It’s like they have created something a lot ahead of it’s time (Remember Newton?). I couldn’t enjoy the music, movies, the basic software and games I used to love on Windows. I couldn’t do anything. It was frustrating.  But wait, the OS isn’t designed for running heavy softwares and games, it’s only for the Web and Email. Sure it is awesome at running Web apps and surfing the internet but when you buy a device like that, you expect it  to fulfill atleast the basic entertainment needs of yours.  And this is where iPad comes in. Apple marketed it’s tablet as a complete mobile platform which you can use to watch videos, surf web, read books, play games and do other countless stuff. Chrome OS isn’t even close to doing what an iPad can.

                           To succeed in this crowded market of Mobile Internet Devices Google should consider taking the path of Android. Dumping or merging the Chrome OS with Android would be a good bet . Android Devices are in much better position today and they can’t go wrong with it. Having one OS will also remove the confusion between the consumers.  And that Hindi saying “ek se bhale do” doesn’t work here.

8 Predictions for 2011 in the World of Tech

1. Apple will release it's magical and revolutionary devices iPad 2, iPhone 5. New features include :-

a) Doing your laundry.

b) Taking your dog out for a walk.

c) Making iPhone 4 and iPad 1 users feel like a bunch of twats.

Every tech journalist on earth will declare the move as "game changing" and "bold" like they always do. Be prepared to read a lot of iPaahd vs myPaahd kind of news and reviews.

2. About 23,55,354 vendors will launch products having Android, out of those only 50 will work.

3. The year is going to be a 3D one. 3D TV's, 3D games, 3D phones will take the market with storm. On one hand, the "Sheela" on a 3D TV will appear a lot hotter, but on the other Stupid India TV’s breaking news will look even more moronic.

4. Microsoft will add the functionality to copy paste the text in Windows Phone 7 and then they'll call it Windows Phone 8. None of the news agency will notice this move, cause who cares for windows phone anyway.

5. Nokia will shuffle from it’s age old Symbian to Meego OS and then back to Symbian, finally admitting that both of there Operating Systems are shit and they are moving on to Android.

6. Facebook will launch it’s short messaging service which will rival the likes of Gmail and Yahoo mail . Facebook says, it’ll remove the barriers to the Email communication by removing the subject box and other unnecessary stuff. Seeing that today’s youth can’t even write a Email in proper format and PrPer SpLlng, it’ll be a one step forward to dumbing them even more.

7.  MNP will make the Mobile Operators running like mad dogs pissing all over the place to maintain there share in the market.  Airtel is already delivering pizzas and cold drinks to the customers who are not happy with there service. People are calling Airtel helpline instead of Dominoes or pizza hut for ordering pizzas.

8.  Microsoft will disclose that they have activated around a million windows 7 handsets, 999,800 of them by one S. Ballmer living in Redmond, Washington.

10 Things I Learned in KIIT.

1. Ten minutes is more than enough time to get ready for your first class.

2. Professors without notes (chutkas) are like cars without engine, useless.

3. Every seminar, workshop, society or fest sounds huge until you attend it, then you realize that the so called "Grand Event" is not so Grand.

4. 1 day before mid sem and 4 days before end sem are enough to prepare you for the syllabus which was being taught for last 5 months.

5. Demonstrators in the labs are like programmable androids, never ask them anything other than what has been programmed or they will produce a debugging error.

6. In case there's a holiday, the notice for it will arrive at your hostel 15 mins before class timings.

7. Semester time table changes more often than you change your clothes.

8. Everything you learned in the previous semester gets evaporated from your mind like a cat pissing on a hot tin roof.

9. You realize you are getting a bad education when even after 2 years of studying, you fail to repair a tube light or a bulb.

10. No matter how many books college provides you at the start of the semester, in the end it always goes down to xeroxs, chutkas and torn pages from the books of library.

Add some more if you like :)