Op-Ed in ETBFSI.com:
Insurance unlike other financial services needs to be delivered and not distributed. Unfortunately, it is the ‘Point of Sale’ (POS) that gets priority over the ‘Moment of Truth’ (MOT). The physics has not changed despite all the changes over the years – growth of retail segment, arrival of private insurers/ micro-insurance, application of tech et al. Rather than reinventing itself – the industry has settled for a fragmented response to all these ‘new and increasing demands’.
https://bfsi.economictimes.indiatimes.com/blog/insurance-customers-desire-an-amazon-moment/4461
Sonu Bhasin is one of the early and senior women professionals in the industry. In her career of over 30 years she set up and managed large businesses, and diverse teams, across financial and non-financial sectors in India and overseas.
Sonu led various businesses in senior leadership positions during her corporate career. She began as an elite TAS (Tata Administrative Service) Officer with the Tata Group and spent 13 years with the Group before becoming a banker. As a banker, she was a Director at ING Barings, President Axis Bank, Group President Yes Bank before going back to the Tatas as COO Tata Capital Limited.
Sonu is an Independent Director on Boards of well-known and reputed domestic and multinational companies. She now focuses on family businesses and is the Founder of FAB – Families And Business. She is a family business historian and is the Editor-in-Chief of Families & Business magazine – India’s only standalone magazine that addresses the concerns of family business owners/promoters/entrepreneurs. Sonu has worked extensively with both, the patriarchs and the inheritors of family businesses and has enabled them to look at their businesses through the prism of family dynamics.
Her first book The Inheritors – Stories of Entrepreneurship and Success, published by Penguin Random House, is a bestseller in the business books category. Her second book, Unstoppable – Kuldip Singh Dhingra and the Rise of Berger Paints, published by Penguin Random House is the biography of the owner and promoter of Berger Paints. Sonu is also a columnist with The Economic Times.
Praveen Gupta: From your time at the Tata Administrative Service (TAS) to now, as a member of many boards, how in your perception has corporate India evolved?
Sonu Bhasin: I have been part of Corporate India since 1987 and I do believe that it has evolved significantly in the last thirty plus years. One of the key areas is the focus on Corporate Governance which has increased, no doubt mandated by the Regulators. The Boards, since you asked about them specifically, have also undergone some changes, again due to the regulators. The focus on the qualifications of the directors has increased and the Board is no longer a place just to have chai & samosas and catch up with friends.
PG: In terms of gender diversity on an overall basis the multinationals seem to be doing the best whereas Public Sector Companies are laggards (according to a recent IiAS Women on Boards study of Nifty 500 companies). Does this pose any risk to the governance outcome/ bottom-line performance?
SB: I actually have a different view. If you see the leadership positions in the private sector companies, there are still very few women there. When asked about this the CEOs and the HR people typically talk of the constraints faced by women due to maternity leave and lack of mobility. They talk of the inability of women to take on postings outside the city they live in. Thus, they say that due to these reasons the rise of women in the organisations slows down.
If you see the leadership positions in the private sector companies, there are still very few women there.
However, surprisingly women do not seem to face the same problems – maternity and transferability of jobs – in the government and public sector. These jobs are transferrable, and women know it. Women working in the government also have children. Even then, we have women as Secretaries in the Central and State Governments, we have women as CEOs of public sector banks and in PSUs. Thus, the lazy excuse of ‘women have constraints’ need to be relooked, especially in the private sector.
Regarding performance of organisations, there are enough studies by reputed firms to show that organisations with diversity deliver better results for all stakeholders.
However, surprisingly women do not seem to face the same problems – maternity and transferability of jobs – in the government and public sector.
PG: How are the Indian home-grown businesses doing on this front? Is the glass ceiling still in place? Is there a room for cognitive diversity?
SB: There is a glass ceiling everywhere and there is no running away from it. In some organisations it is thick and almost unbreakable while in the others there are cracks evident. In a very few organisations, the ceiling has been broken. The Indian home – grown businesses follow the general trend as it is not a business matter alone; rather it is a matter related to societal norms. However, Indian family businesses have an advantage over the non-family ones – if a patriarch takes a call to have his daughter as his successor, no one can object!
There is a glass ceiling everywhere and there is no running away from it. In some organisations it is thick and almost unbreakable while in the others there are cracks evident. In a very few organisations, the ceiling has been broken.
PG: Are family owned businesses providing equal opportunity in leadership positions to the daughters?
SB: I cannot generalize this as it depends on the patriarch. When the patriarch has only daughters, the decision is easier – Apollo Hospitals and Luxor are two examples. Then there are the patriarchs who chose their daughters over their-sons to be their business successors. These numbers are few but do exist. I would say that the family businesses are indeed giving their daughters opportunities but will not go as far to say equal opportunities.
I would say that the family businesses are indeed giving their daughters opportunities but will not go as far to say equal opportunities.
PG: How big do you believe is the gap between men and women when it comes to remuneration?
SB: The gap is significant. There are many studies carried out and it comes out consistently that for the same work, men get paid more than women.
PG: Globally ESG (Environmental, Societal, Governance) is what really constitutes governance now. How serious are Indian corporates about key components like #sustainability?
SB: Sustainability is an area that corporates cannot ignore any longer. There is a social pressure as well as pressure from the authorities. Thus, there is focus on sustainability and increasingly it does get discussed at the Board levels.
PG: Is #ClimateChange on the discussion agenda at Indian boards?
SB: From what I have seen and what I have heard the Climate Change is a matter which the boards consider important but there is not much discussion on it unless there is a specific reference to the business model.
PG: Is the #pandemic and its ramifications like work from home (WFH) narrowing the options for professional women or proving to be more challenging for working women?
SB: Work from Home is both an advantage and a disadvantage for a woman. The advantage for the women is the same for men working from home – no time spent on commuting, flexi-time etc. However, there are more disadvantages for women working from home than their male counterparts. If the woman is home, it is automatically assumed that all housework is her responsibility. Thus, unless the family adjusts to the WFH culture, we will see a lot of women actively wanting to come back to the office
There are more disadvantages for women working from home than their male counterparts. If the woman is home, it is automatically assumed that all housework is her responsibility.
PG: Why should women concede to say aiming for 30% of independent directors to be women (from the current 17% at the Nifty 500). Why not 50%? The floor tends to become the ceiling!
SB: 30 percent is a start. It is better than what it was before the regulator mandated the appointment of a woman director on the boards. I believe that it will take some time for all companies to be compliant in the letter and the spirit of the regulation. Once that happens then the ceiling can be raised. Otherwise there can be a high ceiling but an empty room!
PG: Many parts of our country remain dominantly paternalistic. What do you think needs to be done to make it a level playing field for the girl child to grow in?
SB: You are right when you say that large parts of our country remain paternalistic. In fact, I would say that a large part of the world remains paternalistic. Seen in that context I would say that India, even though largely paternalistic, ‘allows’ its women to go further than most countries do. We have all seen that one of the most developed nation in the world, the USA still has not had a woman leading the country. In fact, women were allowed to vote after many years of their country’s independence. In India, on the other hand, we have had women prime ministers, presidents, chief ministers, leaders of political parties, secretaries in the government and more.
I would say that a large part of the world remains paternalistic. Seen in that context I would say that India, even though largely paternalistic, ‘allows’ its women to go further than most countries do.
To make the world a level playing field for the girl child the effort has to begin at home. Mothers in law need to stop asking their bahus to produce a grandson; mothers need to stop treating their daughters and sons differently; mothers in law need to stop expecting their working daughters in law to come back home after a full day’s work at office and then make dinner for the family while the son lounges around, tired after a full day’s work at office. Equality and treating daughters and sons with equanimity at home right from the start will sow the seeds for a world which has a level playing field.
Equality and treating daughters and sons with equanimity at home right from the start will sow the seeds for a world which has a level playing field.
PG: The world has been abuzz with the five countries that have coped exceptionally well with the pandemic – needless to mention their performance on SDGs. Is that not a signal strong enough for what the rest of the world ought to do?
SB: The work done by the leaders and people of the five countries has been exceptional and is indeed a shining example for all of us to follow.
PG: Many thanks for sharing some amazing perspectives, Sonu! My best wishes for your ongoing explorations.
Background
Much is being written around the globe about the increasing anger and mistrust towards China across nations, due to its role in the start of the pandemic particularly, in terms of transparency and communication about the severity and risk that the virus posed. In India there is keenness to capitalise on this perceived opportunity by positioning ourselves as a good alternative to China. Global players are seeking to diversify their supply chains and thereby attract investment and jobs to India, boosting foreign trade at the same time. While this appears an opportunity, it lacks imagination and is a rather unidimensional approach. A long-term sustainable win-win one would be in the form of engaging with China and leveraging its unique strengths. To top it all we are neighbours. Is there a way we could use it as a blessing? It is what this exploration is about!
The Dorabji way
In traditional wisdom it was either a business that followed a flag or a flag that followed business. Whereas the East India Company paved the path for the Union Jack to India, it was American companies that followed the Sino-US rapprochement. Once in a while you see an outlier achieve success, by following its own calling irrespective of the political imperatives. The New India Assurance Co. Ltd. was one such rare case when its founder Dorabji Tata implemented his audacious vision for an international imprint despite the constraints of a colonial economy. That it did not fully succeed could be ascribed to the fact that it was way ahead of its time and the nationalisation of the insurance industry stalled it in the tracks.
The New India Assurance Co. Ltd. was one such rare case when its founder Dorabji Tata implemented his audacious vision for an international imprint despite the constraints of a colonial economy.
Before I narrow this down to a limited firsthand exploration and insight, I wish to put out the canvas that Dorabji1 set out to address. At its zenith, when the geography extended from the Caribbean to Fiji – the sun never set on the New India ‘empire’. It extended to over 70 countries when the number of countries were far fewer than today. A cadre of foreign service officers was specially created to nurture it. Yes, it was a time of low touch or virtually no regulations which suited an entrepreneurial spirit. The Snowy Mountains project, in Australia, for instance, led to setting up a full-fledged company with 100 employees – when the country practiced a ‘White Australia’ policy. Starting an agency, within two years of existence, in London was not just a leap of faith but an endeavour to build capabilities and skills to justify the self-belief. It acquired licenses to trade in many parts of North America including every province in Canada. A post war entry into Japan and Germany defied conventional wisdom. All this and much more stirred by a vision and conviction.
As a beneficiary of this farsightedness, I owe it the opportunities to run business in Thailand as well as Hong Kong and deal first-hand with markets such as Taiwan, Mainland China, Indonesia, and Vietnam. Given my focus I have chosen this as a rationale for a possible Sino-Indian inter-corporate exploration and even beyond – notwithstanding the polity in which the companies operate. Interestingly, what I am putting forth did not end up with a wonderful six and a half years personal experience. The journey continues.
In a post war world taking sides with the winner was the general rule. However, the choices ‘New India’ made defied this prevailing wisdom. Its timing of entry, for instance, into Japan and Germany was non-conformist. The key focus of this piece is the Company’s ability to maintain cordial engagement with Mainland China in its space (post the Cultural Revolution it had to shut shop in China – with insurance becoming non-existent. The Company continued a relationship with the regulator People’s Bank of China).
Despite all the prevailing stress in the then English Colony, ‘New India’ maintained a branch operation in Hong Kong. It also had in place a business arrangement with Tai Ping Insurance Co. of Taiwan, serviced out of HK. No Indian business house or for that matter any other global business brand had such a three-dimensional play in place. Maverick vision yes, but surely a lost opportunity that could not keep it going! It is this aspect of corporate consciousness that deserves more attention in management literature. Despite being the master of an inherited conglomerate in making, Dorabji Tata bestowed a unique and exclusive exploration upon his insurance enterprise.
Maverick vision yes, but surely a lost opportunity that could not keep it going! It is this aspect of corporate consciousness that deserves more attention in management literature.
The Dragon and the Elephant: A case for synergy continues!
Late Chairman Deng Xiao Ping’s launch of China’s market-oriented reforms was a master stroke resulting into an outcome unparalleled in human civilisation. To blame China for all the woes – particularly of the western world – is not only naïve but lacks in context. Rather than a rise of China it is its resurgence that needs to be understood. Like many of us, my knowledge of Chinese history was coloured by the western interpretation. Further conditioned by the traumatic Indo-China war resulting from the border dispute inherited from our colonial master. If one were to set that aside – an incredible reality emerges which is about co-existence and synergies between the dragon and the elephant. Can that ‘New India’ vision from the past be juxtaposed into the present? Can a corporation side-step the narrative between two states howsoever adversarial and yet facilitate a benign chemistry between them? It may sound utopian, but the New India case study lends strong evidence. And there is a compelling reason for us to seize the momentum unleashed by Deng Xiao Ping. More on that soon.
I am old enough to recall media stories as to how imports from China helped the American economy maintain its inflation rate at almost 1% per annum. In the not so distant a past was the OPEC crisis which forced the Americans to scale down their car sizes from the gas guzzlers to the Japanese made efficient but smaller versions. The Americans, particularly the United Auto Workers (UAW) detested the impact caused by the Japanese. During my first ever visit to the US, in 1984, I saw posters saying ‘Unemployment made in Japan’ stuck on the walls of an auto assembly plant in the Mid-West.
It may sound utopian, but the New India case study lends strong evidence. And there is a compelling reason for us to seize the momentum unleashed by Deng Xiao Ping. More on that soon.
In its persistent wooing of China in the early days, this is what George W Bush, then VP, said in 1985 while addressing the Sichuan University: ‘American firms were eager to invest in China’. ‘American consumers would soon hanker after Chinese goods’, he predicted. ‘We are interested in helping China,’ Bush told his audience. ‘Very, very interested.’ The low-cost of virtually everything else that followed courtesy China, was a welcome relief after a rude inflationary shock fired from the barrel of the oil.
Insights from the New India experience
I can vividly recall numerous incidents about how the Chinese built their position – from the sidelines of my erstwhile industry. During 1991-93, I was stationed in Bangkok. One of our local clients, of Chinese descent, exported earth moving equipment worth millions of US Dollars to Guangdong province, China. To cover the transit, he would buy the most basic form of transit insurance from my company. I tried hard to reach out and convince him for a wider coverage. He was not easy to find. When I did manage to see him, I realised how busy he was sourcing second-hand equipment from wherever in the world it was available. He imported them into Thailand, reconditioned and shipped them to locations in China. ‘There would never be an insurance claim because the Chinese are in a big hurry’, he would assure me! One began to decipher what that meant when media reports said coastal Chinese GDP was growing by 30 to 40% per annum.
In 1993 when I landed in Hong Kong for my next stint – I could feel the tectonic shifts. Car thefts (from HK to China), for instance, started with small versions of Toyota and Honda. Mercedes and Lexus were in vogue by the time I arrived. As they peaked, there were not many insurers willing to insure them for the standard coverage or at the normal price. It did not matter if HK was left hand drive and the Mainland right hand! Manufacturing started migrating to the neighbouring Shenzhen and beyond, in Guangdong. The labour cost was a mere 10% of HK. Incentives were plentiful and for the asking. Suddenly the placid duck-farms visible from the border lookout of Luk Ma Chow became home to construction cranes. Thanks to Shenzhen’s meteoric rise, HK pales before it.
Industry migration from HK and Taiwan to the Mainland
Just then Ranbaxy was establishing a small manufacturing facility in Guangzhou and sought my help to arrange a local insurance contract. I was obviously curious as to what made them enter China. The answer was simple, ‘we can charge Rs. 10 here for a capsule that gets us Rs.1 in India’! Mind you, this was a little over 25 years ago when the target audience was the Chinese domestic market.
My attention was also drawn to a portfolio in Taiwan which had begun to shrink. This was about prosperous Indian origin traders who would majorly export container loads of cheap goods, such as footwear, to Africa. The manufacturing moved from Taiwan to across the straits in the Fujian province. Despite all other political differences and sabre rattling – the business reality was a binder. The one thing that continued to be made in a high cost economy like Taiwan was the sticker ‘Made in Taiwan’. So, what were the erstwhile shoe manufacturers up to? Believe it or not, virtually overnight most of them started assembling laptops! A quantum leap and pace of change seen nowhere else other than the Greater China.
Despite all other political differences and sabre rattling – the business reality was a binder.
China’s amazing growth story: Emotions v rational!
The overwhelming cry now in the wake of the pandemic is to de-risk by moving manufacturing out of China. However, is that the solution? China has gone up the value chain and will continue to do so. Yes, not everything ought to be in and around Wuhan or for that matter any single hub. The Far East (FE) and South East (SE) Asia are so interdependent that their respective unique politics does not any longer come in the way of trading with each other. Such is the intensity of interdependence that the FE and SE Asia now account for a major chunk of the global trade.
Can Vietnam, Thailand, Myanmar, Indonesia by themselves or collectively rival what China does? In some ways it is like asking can India be replaced as the back office of the world. There will be competing hubs be these in Philippines, Costa Rica, Sri Lanka or elsewhere. Could they ever assume the scale and depth we have here? India has evolved so rapidly from the early days of body shopping to the cutting-edge high value offerings of today. Big Tech finds India too compelling to ignore. They have here their state-of-the-art application development centres. The pandemic and the US visa restrictions have now made foreign companies more dependent on development centres. These centres are not outposts anymore but integral extensions of headquarters and being billed as Offshoring 4.0.
In some ways it is like asking can India be replaced as the back office of the world... These centres are not outposts anymore but integral extensions of headquarters and being billed as Offshoring 4.0.
‘No one comes close in the developing world to China. And that is why U.S. companies are so headstrong about staying there’: Why American Companies Choose China Over Everyone Else – Forbes. A more recent issue of Time highlights how and why the costs of decoupling would be steep, and unwanted during a time of deep global recession. And the U.S. bullishness fails to account for the reality of how interconnected the two economies still are. China produces 97% of America’s antibiotics. Apple, the most valuable U.S. company, and the world’s first trillion-dollar one, still produces most of its wares in China. And Chinese enterprise is still finding success in the U.S. Lockdown favorite videoconferencing service Zoom, for example, was created in Silicon Valley by an entrepreneur born in China’s Shandong province.
Some manufacturers who shifted businesses to Vietnam because of rising costs have now returned to China, chastened by labor disputes and other headwinds. With labour cost 10 times more than equivalent skilled workers in China in much of Europe, moving work there will not be viable either.
Footnotes:
1. One name that I came across, again and again, in many parts of the Far East was late Mr. BK Shah. The most longstanding MD of New India Assurance. He carried the Dorabji baton forward. Ensured New India’s position at most high tables. The Asian Hull Syndicate, for instance, was one such and as the head of HK operation I also had the opportunity to be an alternate director to the CMD and ‘hob nob’ with the CEOs of participating blue chip insurers of the region. An actuary by qualification, BK Shah was inducted to the Insurance Hall of Fame. The only Indian till date.
Mr. AC Mukherji (ACM) another illustrious New Indian started as an apprentice officer in 1948. When New India was both a life and non-life insurer. ACM retired as the CMD of the company in 1985. Continued to play an active role, in several capacities, post that. He worked very closely with late BK Shah and is encyclopedic – full of amazing insights. Having nationalised the non-life insurance industry – the government invited Mr. Shah to advise on the structure of the future industry. One of the several recommendations made was to create a separate holding company for the governance of the four newly created entities. This led to the creation of General Insurance Corporation of India. Mr. Mukherji’s first assignment, as an apprentice officer, was as a Cargo Manager to Ceylon. Thereafter he was assigned to Germany and posted at Allianz which represented New India in the country. ACM is fluent in spoken German.
‘’Your bosses like AC Mukherji and KC Ponappa can run the country’’: Such was the calibre of the leadership. Recalling a glowing tribute by Professors Jai and Ghosh at a Management Development Programme in 1984. Late KC Ponappa was then the CMD of United India.
Dr. R.D. Samarth was originally recruited to be part of the exclusive ‘New India foreign service’ cadre. Amongst the several postings across the globe he was the head of HK, too. Following him after a decade plus, I had the pleasure of going through the available company archives. One of the most stimulating discovery was a lucid articulation of the multi-pronged approach to the three Chinese entities Mainland China, Taiwan, and HK). The inherent lateral thinking and the conviction in it was remarkable. Samarth retired as the General Manager at the Company’s Head Office.
Michael Rada is the founder of INDUSTRY 5.0. In 2013, after 23 years of business experience, he decided to break out of a corporate career and set out to create a Wasteless World. By applying systematic waste prevention methodology, in the real-world environment, he has prevented more than one million tons of material and products from becoming waste. Prevention for him is the only cure for combating generation of waste. His work is all about getting this right.
Michael is a much sought-after public speaker and an active blogger both in English and native Czech. He remains involved in teaching Logistics, Global Supply Chain Efficiency, Sustainability, and Innovations to schools and universities. The very disciplines that he applies in making INDUSTRY 5.0 work.
Praveen Gupta: What exactly is International Business Center of Sustainable Development (IBCSD) about?
Michael Rada: IBCSD LAB Ltd, is a company established as a ground stone for the international network of LABs and WERKS set to proceed with systematic waste prevention methodology and its implementation in the local markets. If we imagine this network as a human body IBCSD LAB (CZECH) is the brain, National LABS are the synapsis and the WERKS are the hands and legs.
IBCSD LAB Ltd, is a company established as a ground stone for the international network of LABs and WERKS set to proceed with systematic waste prevention methodology
PG: To what extent does industrial waste impact sustainability of our Planet? What is the scale and how is it compounding?
MR: Industrial waste (produced in various forms in an industrial environment) volume accounts for 60-80% of the total waste generated by humans. It consists of multiple types of waste from NG and obsolete material, CO2 emissions, increased traffic volumes and consumption of land by industrial operations. INDUSTRY 5.0 and Industrial Upcycling categorise waste into Physical, Social, Urban, and Process Waste.
Industrial waste (produced in various forms in an industrial environment) volume accounts for 60-80% of the total waste generated by humans.
PG: Would INDUSTRY 5.0 mean safer processes, more automation, and lesser power consumption? Does it have own standards like for instance the ISO?
MR: INDUSTRY 5.0 means more efficient production matching the consumption. It results in safer environment where machines support human work, but do not decide what humans should do. This is connected to reduced and balanced power consumption as well. There are standards. However, no methodology as in ISO have been developed as yet – because we concentrate on delivering results first. To achieve the change no capital investment is usually needed, it is basically about changing the process. Digitalisation is one of the tools, but not a pre-condition.
INDUSTRY 5.0 means more efficient production matching the consumption... To achieve the change no capital investment is usually needed, it is basically about changing the process.
PG: Industrial waste is a product of technology. To what extent does technology need to be fixed to mitigate the harmful effects of waste?
MR: It is an interesting question. In my opinion, waste is not a product of technology, not in direct relation. In fact, in many cases, it is the result of not so efficient cooperation between man and machine or technology. At the same time, many wastes are generated by wrong or “none” planning at all.
Waste is not a product of technology… it is the result of not so efficient cooperation between man and machine or technology.
The biggest positive impact would come if humans and businesses start to understand waste as own failure. This will help waste prevention. The harm from waste is often on account of the wrong human interaction and understanding of the topic. For instance “Plastic Is Evil” is not true. Plastic is just one of the crude oil derivates and can be turned back to oil. In fact the true evil is the Single-Use, no matter which material we talk about.
PG: Much of what we extract does not circulate? Do you believe a circular economy will be less wasteful?
MR: The current numbers indicate that only less than 10% are directly recovered, globally less than 50% is being recycled. This will change if systematic waste prevention is applied and people and businesses recognise how waste can be prevented. Circular economy concentrates more on the ECONOMY, this is why it is struggling.
INDUSTRY 5.0 concentrates on production and processes. That makes the application fast and efficient. This is also why it has already prevented over a million tons of products from becoming waste. The number is growing fast. If the circular economy keeps concentrating on the economy, it will not decrease the volume of waste. This is primarily because for Circular Economy – Waste Is Treasure! Therefore, there is no real reason to avoid or “kill” treasure.
For Circular Economy – Waste Is Treasure! Therefore, there is no real reason to avoid or “kill” treasure.
PG: As individual consumption levels rise and populous countries like China and India urbanise, the non-industrial waste is an equally threatening development.
MR: The most visible share of the non-industrial waste is represented by municipal waste and 70-75% of this is related to packaging. The issue with this waste is that it contains a wide variety of materials, sizes, and shapes, frequently polluted by other materials. There are only two ways to process it – landfill or burn. Thanks to the recent developments – even this type of material can be processed into oil and carbon fraction. Thereby it can be used as raw material for further production. The latest numbers presented by the World Bank Group indicates more than 2 billion metric tons of municipal waste will be generated yearly.
PG: Are any of the multilateral agencies focused on addressing the challenge. For instance, does any of the SDG talk about waste management?
MR: As of now it is only IBCSD LAB which is implementing the systematic waste prevention methodology using INDUSTRIAL UPCYCLING and INDUSTRY 5.0 as the tools. SDG goals have been set later. Those refer to waste and prevention, but just as the Circular Economy it considers waste as treasure – which means true waste prevention is not being applied.
SDG Goal12 is the closest to the topic. However, it speaks about recycling and this can be realised only if waste is being generated. Likewise, other global institutions and organisations concentrate on “Clean Up” but not on prevention.
SDG Goal12…speaks about recycling and this can be realised only if waste is being generated...other global institutions and organisations concentrate on “Clean Up” but not on prevention.
PG: Shouldn’t industrial companies be responsible for the waste their businesses generate? The most amount of plastic seen in our oceans are plastic bottles from Coke and Pepsi.
MR: Industrial companies should be directly responsibile. At the same time, the indirect responsibility in the form of handing the responsibility to others (likes of CO2 EMISSION TRADING, GREEN PUNKT, and EKO-KOM) should be limited or eliminated. The responsibility for keeping the bottles out of the ocean should shared between Plastic Granulate Producer – Bottle Producer - Beverage Producer – Retail Store - Consumer. Shared responsibility will eliminate the possibility of one blaming the other. In the end nobody is responsible for the damage that happens.
Shared responsibility will eliminate the possibility of one blaming the other. In the end nobody is responsible for the damage that happens.
PG: In a recent post you have highlighted the blindness of giants. The bigger a company need not make it a bigger waster?
MR: Giants are none other than the bigger entities. Because we speak of giants, the volume of “nutrition = money = profit” has to be adequate. Many giants see only nice tables and charts presented by those who live from giants disability to see the reality, but there is one common wake up call and question which work with all of them. “Do You Want To Generate Waste Or Profit?” It is not the Ecology, but the Economy which moves them to change. The big advantage of INDUSTRY 5.0 and Industrial Upcycling is that there is no need for capital investment at the beginning to generate savings. This is why so many consider the change or realise the value already.
“Do You Want To Generate Waste Or Profit?” It is not the Ecology, but the Economy which moves them to change.
PG: Do you factor wastage of natural resources. Water being one?
MR: WATER is one of the most precious resources we prevent from being wasted. At the moment there are three successful projects - Low-Pressure Dry Fog Firefighting (95% of water reduction), Water Pump Floris (Deep Drill Water Supply) and Grey Water Recovery systems. It is very important for me to completely eliminate the wastage of water. This is why I am trying to increase the efficiency of processes and water delivery. Likewise, I am also supporting many other projects including vertical farming and green roofs.
WATER is one of the most precious resources we prevent from being wasted.
All these projects are running starting from Czech Republic, many destinations already benefit from these including parts of India. Here are the links DRY FOG – https://alatyr-extinguishing-systems.com/en/ Water pump – http://pfloris.com/ Grey water recovery – only in Czech Republic – https://werowater.eu/.
PG: The fossil fuel industry is the biggest polluter today. How can INDUSTRY 5.0 fast track its transition to renewable energy?
MR: Same as in other segments it is not the fossil resources, but the decision that it should be only fossil fuel or only renewable source that deliver imbalance in the systém. In fact there can be synergy between these. There is possibility to combine efficiently various energy sources but until the arrival of INDUSTRY 5.0 it was ignored and this is starting to change.
There is possibility to combine efficiently various energy sources but until the arrival of INDUSTRY 5.0 it was ignored and this is starting to change.
PG: Is INDUSTRY 5.0 aligned to the goals of the Paris Agreement? Can it slow down the Planet’s rapidly rising temperature owing to the industrial activity?
MR: I am very sorry, but Paris Agreement has not contributed to positive change, nor has Kyoto Protocol. In fact they do very opposite, they legalise the evil by putting a price on it. Not only have we lost precious time, rather than positive impact the very opposite of declared improvement has been achieved. INDUSTRY 5.0 and systematic waste prevention have positive impact on global climate. The best proof is the COVID-19 lockdown, that cleared the sky in so many locations and cities only due to drop of production on a global level. We can not stop the climate to change, but we can stop the process of speeding up due to so called unlimited production and hunt for profit.
Paris Agreement has not contributed to positive change, nor has Kyoto Protocol. In fact they do very opposite, they legalise the evil by putting a price on it.
PG: What’s your vision?
MR: I have only one aim, to build up a world free of waste in all forms. A world in which all people can live meaningful lives in harmony with nature. For this we need to have wasteless industries and this is what INDUSTRY 5.0 principles and implementation will continue to deliver.
I have only one aim, to build up a world free of waste in all forms. A world in which all people can live meaningful lives in harmony with nature.
PG: Thanks Michael. My best wishes in your endeavours towards achieving a world free of waste.
Praveen Gupta analyses a new study on gender diversity among Indian corporations: https://thejournal.cii.co.uk/blog/diversity-challenge/
“India remains well behind other markets that have targeted female representation of atleast 30 percent on boards”, says Ms. Hetal Dalal, COO, Institutional Investors Advisory Services (IIAS).
“Corporate India: Women on Boards” a report recently released by IIAS shows that at the Nifty 500 companies, women account for 17 percent of the board directors.
The report also recognises that while at the board level #gender#diversity is improving – it is still lagging behind at the leadership and middle management levels.
Needless to mention that much remains to be done to do away with the systemic barriers on the way up the hierarchy. In a largely paternalistic society, a female child needs to navigate through a lifetime of challenges. Breaking through a glass ceiling is never easy.
Brad Zarnett is a Canadian sustainability strategist, prolific writer and blogger. He explores how capitalism has failed to protect environmental & social capital and what we can do about it. You can read more of his writing here.
PG: Why is there a serious lack of urgency when it comes to the Climate Crisis? To what extent is it owing to the bureaucracy at the multilateral agencies? Influence of climate deniers/ vested interests?
BZ: The climate challenge is a mess. Those who have acquired wealth from the current capitalist system and who control the media are not interested in change. They have a good thing going. The last thing they want is government intervention that takes away their control and profits. They’re the Kings of our time with both financial and political power. In the short term they can use their money to escape the pain of climate change while spreading the lie that the market can find a solution. Just like public health (The US is a perfect example), Climate Change isn’t a problem that can be solved individually in the marketplace. It’s a global societal problem that can only be solved with government leadership.
Just like public health… Climate Change isn’t a problem that can be solved individually in the marketplace.
PG: What would be your prescription to overcoming any resistance/ objections?
BZ: This is a complex issue. People who reject the science don’t want to accept that they’re part of the problem. To do so would mean that they would have to give up their jobs in the oil and gas industry, banking, consumer goods or any large corporation for that matter. You can’t expect people to walk away from their ability to earn a living – people need to eat. Those people need to be taken care of if we want to find solutions. They will need to be paid not to work while they are retrained. (I explore this in depth in this article)
You can’t expect people to walk away from their ability to earn a living – people need to eat. Those people need to be taken care of if we want to find solutions.
PG: Despite the current pandemic, is there something amiss that prevents much of the world to see the writing on the wall?
BZ: Climate change is a slow moving crisis. It doesn’t feel urgent. It doesn’t engage our central nervous system in the same way as a near real time crisis…like COVID-19. As a species we’re not scared — there’s no collective release of adrenaline to trigger a change in our climate-destroying behaviours. There’s no urgency to contemplate life without all of the different conveniences and cheap products that we’ve come to enjoy. This lifestyle is at the root of the problem.
Climate change is a slow moving crisis. It doesn’t feel urgent. It doesn’t engage our central nervous system in the same way as a near real time crisis…like COVID-19.
PG: How can the Catholic Church, which has been at the forefront under the Pope’s leadership, make the faithful act decisively?
BZ: He can’t. Religion for most part is separate from people’s economic lives. Whether we like it or not, we are all living in the web of the capitalist system, it controls every aspect of our lives. Most people are just trying to survive with a roof over their head and some food on their table.
Whether we like it or not, we are all living in the web of the capitalist system, it controls every aspect of our lives.
PG: Why do countries like Canada declare Climate Emergency on one hand and allow crude extraction from its tar sands?
BZ: Jobs and votes are the key behind every government’s decisions.
PG: Despite all the squabbling and squandering, are the goals set in the Paris Agreement still reachable?
BZ: No chance whatsoever. It’s done. We need to take the best parts of it and move on. When a company or government talks about 2050 net zero targets, you can be sure that they are still operating in a mindset of the broken system. We don’t need “net zero” we need “zero carbon” targets. One relies on carbon sinks that are being degraded to absorb more carbon and one requires a total reduction in carbon.
When a company or government talks about 2050 net zero targets, you can be sure that they are still operating in a mindset of the broken system. We don’t need “net zero” we need “zero carbon” targets.
PG: What is the price that the Planet Earth will extract if Father Greed keeps pushing it further and farther?
BZ: Complete chaos of our life supporting ecosystems.
Out of control jet stream
Out of control wildfires
Biblical flooding and drought
Lack of food and water
Death of democracy
PG: Any thoughts on what must the developing countries do given that there are not many ideal role models today?
BZ: Become self sufficient. No one will come to save them. For those countries that will become uninhabitable in the next 30-50 years…it will be brutal for them.
For those countries that will become uninhabitable in the next 30-50 years…it will be brutal for them.
PG: The SDGs have been recently called a farce and a smokescreen for further environmental destruction throughout the decade? Any suggested metrics for measuring real progress?
BZ: Wellbeing – the more you create the wealthier you become…not just financial wealth but social wealth as well.
PG: Many thanks Brad for your very candid insights!
“The climate crisis is brought on by technology and its solution will come only through technology”.
Venktesh Shukla (Venk) is General Partner of Silicon Valley based Monta Vista Capital. An early stage venture fund, which invests in companies that leverage AI/ML, blockchain and self-driving systems to transform industries. Portfolio of previous fund included companies solving problems in big data, hybrid cloud, cyber security for preventing data theft and bot attacks, digital marketing, power consumption in mobile and IOT devices as well as automated support through AI bots.
As past President of TiE Silicon Valley and Chairman of TiE Global, Venktesh presided over one of the most powerful networks focused on technology, innovation, and entrepreneurship in Silicon Valley and beyond. TiE, with 61 chapters across 18 countries, exists to promote wealth creation through entrepreneurship. Its membership includes the entire ecosystem of VCs, successful entrepreneurs, senior executives in public companies as well as budding entrepreneurs.
He has also worked with several state governments in India to help craft their policies on startups and to host them during their visits to Silicon Valley. He assists Ministry of Science and Technology on leveraging the diaspora for innovation in science and technology in India.
Venktesh is currently trustee of Foundation for Excellence India Trust (www.ffe.org). He was its founding President for the first 18 years. It has provided scholarship to over 17,000 talented but needy students and enabled them to become engineers and doctors in India. He holds an MBA from MIT Sloan School of Management and a B.E in Electronics Engineering from NIT Bhopal.
Praveen Gupta: What has transformed the Silicon Valley into a big theatre for South Asians?
Venktesh Shukla: The biggest attraction was the concentration of good quality jobs in this area. If you were relocating from another area, you did not have to worry too much whether the job you are going for will work out for you. If it did not, you knew that there were plenty of other companies in a small geography where you could try your luck. This is quite different from any other geography in US where a city or a region will have only one or two good companies that could hire you.
If you were relocating from another area, you did not have to worry too much whether the job you are going for will work out for you.
To a smaller extent, Boston area had similar concentration, but it was not the most desirable place for Desis from the weather standpoint. Boston lost its edge in the 90’s as it completely missed the internet revolution, and the difference in scale of opportunities between the two regions kept getting bigger. Once people get used to Silicon Valley, it is hard to leave the area thanks to its excellent climate, great education infrastructure, concentration of Indian grocery stores and restaurants and richness and variety of cultural activity from all parts of India.
PG: Do you see the possibility of replicating this in India?
VS: To some extent, it has already happened in pockets like Bangalore, the NCR, Hyderabad, and Pune. It is difficult to achieve the scale of Silicon Valley though – not just for India but for any other part of the world. Part of Silicon Valley’s attraction is its openness to talent from all over the world – there are 90+ nationalities represented in the Valley! It also helps that there are two world class universities that have figured out a way to commercialize their innovation.
The biggest strength of Valley now is that most of the potential acquirers of a tech startup are right here so better chances of getting in front of decision makers. Prolific acquirers such as Google, Facebook, Twitter, Apple, Salesforce, VMware, Cisco, Oracle, Splunk, Palo Alto Networks, Visa, Intuit, PayPal, eBay, ServiceNow are located here. Companies that are not headquartered here but nevertheless have a massive presence in the Valley are IBM, Microsoft, Amazon, SAP, and many others.
The biggest strength of Valley now is that most of the potential acquirers of a tech startup are right here so better chances of getting in front of decision makers.
PG: How is the Valley addressing some of the toxic issues which have been a recurring theme?
VS: For the last few years, Valley companies particularly social media companies like Facebook, Instagram, Twitter, and Google to a smaller extent, have been accused of not doing enough to police content on their platforms. Until recently, their defense was that they are not media companies and as such they should not be expected to exercise editorial oversight over what appears on their platform. They claimed that their appeal lies in the fact that are mere platforms that enable anyone to post anything. The outrage that followed the revelation of manipulation of Facebook data for US Presidential Election in 2016 by Cambridge Analytica and Russians put pressure on these companies to accept some responsibility for what appears on their platform.
Gradually, a bipartisan consensus appears to be emerging to hold these companies liable for the content on their platforms or to regulate them outright just as electricity, telephone and cable companies are regulated. Other issues that get attention are inadequate representation of women and minorities (other than Indian and Chinese of course) in tech companies. These are complex social issues that defy easy solutions. It is easy to pay lip service but making a fundamental difference is hard.
Gradually, a bipartisan consensus appears to be emerging to hold these companies liable for the content on their platforms or to regulate them outright… Other issues that get attention are inadequate representation of women and minorities… in tech companies.
PG: As a VC how do you ensure that valuations do not tend to dominate a business model?
VS: Valuations are a function of supply and demand and they also depend on the skills of the negotiators. If the valuation is not justified by fundamentals, sooner or later there is a reckoning of truth. Everyone saw what happened with WeWork and other overhyped companies. Oyo was a great company with a pioneering business model until Softbank got involved. The pressure to grow at a much faster pace made Oyo change its business model and assume much greater risk which was brutally exposed with the collapse of travel after Covid. Not clear though what could be changed here – all investing is in the final analysis an emotional act and sometimes emotions get way ahead of your judgment.
Oyo was a great company with a pioneering business model until Softbank got involved...all investing is in the final analysis an emotional act and sometimes emotions get way ahead of your judgment.
PG: To what extent has COVID-19 put the VC boom on hold? It is being said that the next wave of startups is expected to ditch the ‘unicorn’ envy and strive to be ‘camels’?
VS: What has happened over the years is that venture capital has emerged as an asset class by itself in the asset allocation model that deep pocket investors use. If the overall capital base increases, the funding available to the venture capital community increases proportionately. The capital base keeps increasing regardless of the prevalent market conditions because most of these are pension and retirement funds that grow every year. What that means is that the pool of venture capital available for investment has not been dented in this crisis. Funds are available but the psychology of the venture investment community has changed. They are more cautious now and there is greater emphasis on fundamentals. It is the behavior of the investment community that had given rise to the obsession with Unicorns and it is this behavior that is undergoing change.
It is the behavior of the investment community that had given rise to the obsession with Unicorns and it is this behavior that is undergoing change.
PG: The ‘migrant crisis’ demonstrates that India also needs ‘smart’ villages. Like the rest of the country they need jobs, healthcare, vocational training. The metro cities are bursting from the seams. The virus driven ‘WFH’ model has shown that not everyone needs to live in the big cities. Any thoughts?
VS: It seems to me that the idea of a self-sufficient and smart village is a mirage. Throughout the history of the world, it is the cities that have produced the finest writers, poets, artists, scientists, engineers, and other professionals. In other words, it is the cities that are the cradle of civilization. It is far cheaper to provide basic services such as jobs, housing, water, electricity, health, education per capita in a city than in sparsely populated villages. Therefore, much less adverse impact on climate. If the cities are bursting at the seams, it is a failure of governance rather than a failure of city model for development per se. In most of the other countries, as many as 70% of the population lives in big urban areas. If all these other countries have managed it, India should be able to manage it as well.
If the cities are bursting at the seams, it is a failure of governance rather than a failure of city model… If all these other countries have managed it, India should be able to manage it as well.
PG: India is the third largest emitter of CO2 in the world. The middle class aspires to live an American dream. Does that not run counter to sustainability?
VS: Of course, it does. Everyone wants the conveniences of modern life. And why should they be denied? The climate crisis is brought on by technology and its solution will come only through technology. Government policy, individual initiatives and societal restraint will have impact only on the margins, but it will not be a game changer. For example, no hand wringing was enough to stop countries from building coal fired power plants. Now that the solar and wind power is cheaper to produce, justifying a new coal fired power plant is becoming increasingly difficult. Government policy, climate treaties, and climate activism so far had only marginal impact but shift in technology made a much bigger difference.
No hand wringing was enough to stop countries from building coal fired power plants. Now that the solar and wind power is cheaper to produce, justifying a new coal fired power plant is becoming increasingly difficult.
PG: Can the Valley play a transformational role for India?
VS: How much transformation takes place really depends on India itself. There is no shortage of talent or ideas or desire to change in India. The best thing that has happened to India in the last few years is emergence of startups as drivers of change and innovation. And they are the best hopes for transformation of India. All that India must do is adopt best practices from around the world for nurturing startups and sit and watch. There has been progress in ease of doing business but the regulations in India are still such that it is holding up the transformation of India as an innovation powerhouse. Without innovation, no country in the world has ever become prosperous except for those with the petrodollars.
The regulations in India are… holding up the transformation… as an innovation powerhouse. Without innovation, no country in the world has ever become prosperous except for those with the petrodollars.
PG: Would the pandemic trigger automation with higher application of AI/ ML?
VS: The enthusiasm for AI/ML was already there and the Covid is only accelerating the trend. The need for automation has grown to spare human contact or to spare humans from going to the office.
PG: Many thanks and best wishes for your leadership, Venk!
Chartered Insurance Institute Blog: June 25th, 2020.
A look into the stories of past vaccine development, recent clinical trials and overall disease and related crisis management brings to the fore some eye-opening insights into diversity and inclusion. The role and contribution of women, in multiple facets of this, tends to be overlooked – whether as leaders, subject matter or even the lack of equitable representation. Names like Louis Pasteur or Alexander Fleming dominate a male narrative. It is, therefore, time to remember a few inspirational stories from the past and present. Perhaps these will reinforce the path towards a more diverse and inclusive order – and a sustainable planet!
Also: Fighting the COVID-19 Virus: Clinical Trials Have Opened the Second Front!
Enlightened buyers, particularly those with complex global exposures to litigious markets, are waking up and demanding sophisticated covers for their specific needs.
Topics
Coronavirus | Insurance policy | insurance cover
Praveen Gupta Last Updated at June 20, 2020 23:48 IST
https://www.business-standard.com/article/pf/covid-19-brings-insurance-policies-for-directors-back-into-mainstream-120062001389_1.html : Companies need to learn from all that is unfolding and anticipate what is in store. The lesson is straightforward. If you are in any form of business, whether local or global, and do not have a directors and officers cover, seriously reconsider. If you have one, revisit the coverage and limits. If you do not offer them adequate protection, quality independent directors will not agree to serve on your board, if they foresee risks to their personal assets. This is a growing trend. Do not go for cheaply priced covers, avail reasonable coverage limits, and also look at all other insurances in conjunction with the D&O cover. And remember, insurance is but a part of overall risk management. There should be no trade-off.
Pierre-Eric Lys is both a space and telecom scientist who successfully dabbled in space insurance for many years. He started as the Director of Space Risks at Allianz. Subsequently founded Paris based Spaceco, later moving it across to Dubai – where he founded another successful space insurance venture Elesco. It eventually became a world leader. An ace competitive sailor, Pierre is also a helicopter pilot. During the last five years he is involved in aeronautical research on solar power stratospheric UAVs and other humanitarian projects. Pierre is a keen observer of anything and everything to do with space. In this conversation he highlights the race, rivalry, and collaboration within the exclusive space club. He recalls the magic of live launches from the launch pads and how they sent his adrenaline gushing. In his view space projects fuel ‘positive visions’ thereby helping cope with the challenges we face today. The International Space Station, he believes, is the safest place to be in these times!
Praveen Gupta: Does the successful SpaceX mission to the International Space Station (ISS) by the USA gets it ahead of Russia, in the manned launch capability?
Pierre Lys: To answer this question, you would have to look back into the entire history of manned spaceflights. It all started back in the days of cold war between USA and Soviet Union. Both parties have had their own path – with USA flying to the moon in the late 60’s and Russia flying long duration spaceflights using their Mir station in the late 80’s. As of today, the longest duration flight record is still held by cosmonaut Valery Polyakov, who spent 438 consecutive days onboard Mir in 1994-1995. China later joined the club in 2011. The ISS was then put together as a joint effort between Russia and Western countries, at the end of the 90’s.
Talking about the manned rated launch vehicles – USA developed the Space Shuttle, which was operated between 1981 and 2011, now replaced by SpaceX Falcon 9. Russia has used the Soyuz rocket and its evolutions and has flown nearly 2000 times since 1966. Russia remains today the most experienced country in launching and flying humans into space. Their technology is getting old but has reached an unprecedented level of reliability. In terms of capabilities and technology, Falcon 9 is indeed way more advanced than the Soyuz. However, I believe we would need to see a few more successes before it becomes the reference in the field of human rated launch vehicles.
Russia remains today the most experienced country in launching and flying humans into space. Their technology is getting old but has reached an unprecedented level of reliability.
PG: Is the entrepreneurial zeal of Elon Musk the differentiator over an established bureaucracy of Boeing?
PL: It is certain that Elon Musk had a vision and has remained committed to it, even in difficult times of early failures of Falcon 1 rockets. Both the technical and the manufacturing efficiencies of SpaceX give them a very substantial advantage over any competition. Boeing needs to re-focus on making good aircrafts and good space vehicles in the hard environment of Covid crisis and strong aerospace competition. It is even more challenging for them to switch all their staff to a “nothing is impossible” mode – like SpaceX staff seems to have adopted since day one.
Boeing needs to re-focus on making good aircrafts and good space vehicles… It is even more challenging for them to switch all their staff to a “nothing is impossible” mode – like SpaceX staff.
PG: Did you watch the SpaceX launch from its own ‘trampoline’? Did you feel any different from any past onsite launches? Which of them has been the most memorable?
PL: Indeed, I watched the entire live cover for both the first attempt and the actual launch on May 30th. I would not miss any step of the amazing launch preparation sequence. I was lucky enough to be involved in many manned space program starting from Shuttle to Mir docking and ISS key life support systems. I attended many launches in many countries but launch of humans is always more emotional than satellite launches. I have seen Shuttle launch from Cape Canaveral and Soyuz inhabited launch from Baikonur cosmodrome. I cannot help from thinking about the exceptional number of equipment and qualified people who need to be ready and work exactly as planned at T-0 (launch second).
As an engineer, I am also always impressed by the performances necessary to bring astronauts to a much faster speed than a bullet. This Dragon 2 Demo flight was no different. However, attending a live launch on the launch pad is incredibly special and cannot be forgotten. When the sound of the rocket hits you, your body physically feels the power of the vehicle. And when you know someone is sitting on top of the vehicle, the adrenaline connects directly to your emotions. I was lucky to seat just next to Dennis Tito’s family on the launch pad of Baikonur in April 2001. Today, I still remember every moment of this event, not only because he was the first tourist to fly to space.
When the sound of the rocket hits you, your body physically feels the power of the vehicle. And when you know someone is sitting on top of the vehicle, the adrenaline connects directly to your emotions.
PG: Would space tourism generate enough traffic to make it commercially viable? Would it commence with visits to the international space station?
PL: Space tourism has always been extremely popular. Just ask your friends and relatives, you would be surprised by the number of people who would like to fly to space. The hurdle is usually not the risks but the financial part of it. Dennis Tito’s flight to the space station cost him USD 20 million in 2001. Twenty years later, the price has reduced by a factor 100. No doubt this trend will continue. I need to add the numerous number of near space experience offered today from accurate simulators to 0-gravity flights in airplanes.
I believe, however, that the International Space Station is not the easiest place for tourism. First, it was designed as a laboratory and it requires specific and complex training. Second, I do not believe that tourists would want to fly for more than a few hours, simply because the body reactions during long spaceflights are still difficult to accept just for pleasure. Third, going to and returning from the International Space Station requires a difficult in-orbit rendezvous. It is inefficient to fly there and return just for fun. I believe that short term flights to experience no gravity and to see the earth from above using a dedicated vehicle is certainly the future.
I believe that short term flights to experience no gravity and to see the earth from above using a dedicated vehicle is certainly the future.
PG: Are actuaries and underwriters ready to price such risks?
PL: Underwriting space risks is usually not an actuarial exercise, for the simple reason that the statistics are usually too low in numbers to draw any inference. Space underwriters are usually qualified space engineers who would consider the flight data, manufacturing record and testing of the equipment that are used – to price the risk. I remain proud to have provided insurance for the first commercial Falcon rocket.
Space underwriters are usually qualified space engineers who would consider the flight data, manufacturing record and testing of the equipment… to price the risk.
PG: Do hedge funds continue as risk carriers for launches?
PL: From my experience, space risks is like any other high volatility risks. The first benefit of only insuring launches is that you can actually ‘watch the claim live’ – right in front of your eyes. However, if you decide to insure satellites, it is the opposite, you cannot send an expert to assess the damages! You would have to rely on temperature, voltage, current data to assess the loss and determine the claim value. Hedge funds are looking for risks which are de-correlated from large natural disasters on earth as a good supplement to their portfolio.
The first benefit of only insuring launches is that you can actually ‘watch the claim live’ – right in front of your eyes. However, if you decide to insure satellites… you cannot send an expert to assess the damages!
PG: Jeff Bezos believes fastest way to Mars is via moon. Is he on the drawing board? What kind of time frame could he be nurturing?
PL: Bringing humans to Mars is a challenge in many ways. I would just start with an analogy which helps to visualise the distances: if the earth were a size of a football, the moon and mars would be the approximate size of an orange. The moon would be a few meters away from the earth ball, but mars would be a few kilometres away. This generates a large list of issues but just to share a few would help to answer your question. Communication with the earth would necessitate for the signal a few minutes to reach planet earth and then again, a few minutes for the mars inhabitants to receive an answer. Scenarios like “Houston we have a problem!” would then be somewhat different.
Bringing humans to Mars is a challenge in many ways… Scenarios like “Houston we have a problem!” would then be somewhat different.
The mars inhabitants would have to be autonomous in many ways. They would have to solve all kinds of problems (technical, medical, etc.) on their own. This brings me to my second point: you need to carry a lot of mass on the planet in order to embark all life support systems, and by the way you would also need to have the rocket and fuel to come back to earth at some point. This is a big challenge. Of course, we can imagine that fuel needed to return is produced on mars (therefore the search for water is so critical). However, the quantity of hardware is so significant that it cannot be a single rocket mission. One would first need to aggregate the cargo outside of earth gravity and then move this assembled cargo to mars.
The moon is certainly a good base for this because it is a lot easier to leave lunar gravity than to leave earth’s gravity. Interestingly, it took a decade to put the ISS together, but SpaceX has shown that it is possible to reduce the delays by a large factor. Once qualified for orbital missions, it is likely that Bezos’s Blue Origin program will show same pace. It is quite conceivable that building an infrastructure in the earth orbit or on the moon could be done in less than 5 years from now.
PG: Last but not the least, what makes you believe that we need projects like this, in these times?
PL: Our world is permanently subject to difficult challenges such as natural disasters, malnutrition, and more recently the Covid pandemic. Humanity has shown its resilience, however, there are multiple benefits for the people to have ‘positive visions’ as well as challenges to face. In today’s world, international cooperation is often reduced to international organisations like United Nations and World Health Organisation. Apart from large sports events like the Olympics or World Cups the outcome is never as visible as an actual project which everyone can see, understand and be part of. Space projects are exceptional, in this respect, in several ways. The International Space Station is a good example.
The Chandrayaan missions have been followed by millions of people around the world. Thousands of Indian engineers have been involved directly or indirectly in this project. I am amazed by the level of details known by your countrymen about the past and future Indian exploratory missions.
There is certainly an enhanced pride when significant projects have a national content. I would just refer to a speech from Dr APJ Abdul Kalam during the International Astronautical Congress 2007, in Hyderabad. His speech was a direct message to the young generations. Dr Kalam explained the importance for a country to have a sustainable growth path, and the vision to see India proud of its leadership. He explained to the young generations that every one of them will be an active contributor to these goals. During the following decade, the Chandrayaan missions have been followed by millions of people around the world. Thousands of Indian engineers have been involved directly or indirectly in this project. I am amazed by the level of details known by your countrymen about the past and future Indian exploratory missions.
PG: Many thanks for these ‘out of this world’ insights, Pierre!
The Diversity Blog 