Why A Blinkit-Like Approach To Reduce Costs Isn't The Best Way Forward. India Needs Innovations.

Hey there, I'm TCA Sharad Raghavan, Deputy Editor at The Print, and welcome to another exciting edition of "Standard Deviation," my column and video series. Today, I want to talk to you about a topic that's been buzzing in my mind - the impact of a blanket-like approach to cost reduction on our economy and workers. But fear not, because I'm here to show you a brighter path to prosperity.

Innovation Over Cost-Cutting

You see, many companies, just like Blinket, have been following the age-old strategy of slashing salaries to reduce costs. It's a technique that's been tried and tested, but is it really the best approach for everyone involved, including the companies themselves? I argue that it's time for a radical shift in perspective. Instead of the traditional cost-cutting method, companies should focus on innovation to increase their revenues.

The challenge lies in finding innovative ways to get more out of your workforce without pushing them to their limits. We don't want to exploit our employees; we want to empower them. In a previous column, I highlighted the need to include labor innovations in our discussions about research and development (R&D). It's not that we should stop investing in cutting-edge technology and software, but we should direct our investments towards labor-oriented applications.

The Capital Labor Ratio Conundrum

Let's delve into some basic economics. There's a metric known as the "capital-labor ratio." This metric measures the amount of capital used in an economy or a company per unit of labor employed. In simpler terms, it gauges how capital-intensive an economy or company is. Traditionally, the focus has been on increasing capital intensity, as it's seen as more cost-effective to invest in capital rather than labor.

However, India is a unique case. Our vast population necessitates a different approach. We can't simply emulate developed countries by reducing the workforce. It's contradictory to criticize the government for high unemployment levels while advocating for innovations that might worsen the employment situation. What we need is a "labor-capital ratio" that measures how much labor is employed per unit of capital.

The objective of R&D investments should be to increase profits by improving this ratio. In essence, companies need to discover ways to make more money while employing more people. This is what I call "useful innovation."

A Closer Look at Delivery Models

Now, let's examine a practical example - the challenges faced by companies in the quick delivery industry. One issue is that many orders come in during peak hours, creating surge pricing. But what about non-peak hours? These companies often have an underutilized fleet of drivers and bikes during these times. Innovations are needed to optimize their use.

Consider the inefficiency of deploying separate drivers for orders placed within minutes of each other. This is where targeted R&D can make a difference. Developing software that efficiently tracks orders, driver locations, and available resources would significantly enhance operations. Amazon already employs a similar approach, but we can take it a step further.

Monetizing the Return Journey

One major inefficiency in delivery models is the return trip. Drivers often return to the warehouse empty-handed, generating no revenue for themselves or the company. Here's where innovation can shine. Imagine if delivery apps partnered with cab aggregators. On the way back, a driver could pick up a passenger heading in the same direction, generating additional income. While there are logistical challenges to address, it's a win-win solution for all parties involved, including the economy.

Innovating in ways that monetize a delivery driver's return journey effectively doubles their output while maintaining the same level of capital investment. This approach encourages companies to refrain from reducing their workforce or cutting salaries.

Beyond the Company Level

At a broader level, government policies should also focus on labor-oriented innovation. There's a significant gap between the demand and supply of skills in India. This issue seems tailor-made for AI solutions. Predictive software can be developed to forecast the skills needed in the job market five years into the future. With this information, students can make informed decisions about their college majors, aligning their education with the country's requirements.

Additionally, AI can help design relevant syllabi and introduce vocational training based on the analysis of skill needs. The key is to keep our educational system in sync with the rapidly changing job landscape.

In conclusion, it's time to break free from the conventional and embrace innovative thinking at both the corporate and policy levels. By shifting our focus from cost-cutting to labor-oriented innovation, we can create a brighter, more prosperous future for India. The first step to innovation is a change in our mindset. Let's embark on this exciting journey together.

Thank you for tuning in to another edition of "Standard Deviation." Stay creative, stay positive, and keep pushing the boundaries of what's possible.

[Applause]