Riding the technology wave

Priya Sheth N.S. Vageesh | Updated on November 09, 2012

Ajit Balakrishnan


Ajit Balakrishnan, founder of, recently launched his book The Wave Rider. The book helps connect a lot of dots for those who want to understand what happened in the Internet space in the last two decades. Balakrishnan had a ringside view, advantageously positioned as he was, with a foot in both media and technology. The book is really about his fascinating journey as an entrepreneur.

Balakrishnan takes the reader through a roller-coaster ride: his attempt to build a microcomputer at PSI, to start a new Internet business in 1995; getting leased lines from VSNL, hiring young staff, misreading of the market pulse; the discovery that more Internet users really use it only to check e-mail, accepting that startling feedback and building an e-mail option into their fledgling site within 45 days; the listing on Nasdaq; the dotcom boom and bust; the frivolous class action suit that he encountered; and many other challenges. What did he make of all these ups and downs, we ask him. He says there have been many waves that transformed the business and industrial landscape.


He lists the spinning device that came up in 1660 as part of the first wave of technological transformation, followed by the extensive use of coal-fired steam to drive railways, steamships and machines as the second wave. The third one is about the use of electric power and steel. The fourth is about mass production with oil as a key input. He calls the current wave the fifth wave of technology revolution, spawned by the microprocessor chip that helped ‘domesticate’ computers and led to the invention of the Internet.

The one striking similarity across all these revolutions, he says, is that there is an upturn in the economy/mood when an idea is uncovered, accompanied by a lot of hype as more capital comes into the new business.

But after a point the wave crashes, when the very forces that have been unleashed in the revolution overcome the companies that catalysed the revolution. He says this happened when the railways were set up in the 19th century. The same thing was repeated with the telecom boom more recently.

Yet, as Balakrishnan points out, there were a lot of benefits despite the subsequent crash, because companies had set up the infrastructure by then. In the case of the railway mania, companies may have perished but they had laid the rails. Similarly, in the telecom boom, many companies faded out but they had laid the optic-fibre cables. Balakrishnan seems to suggest that we almost need such waves at regular intervals; while there will be casualties, there will also be corresponding benefits.

Balakrishnan sounds a note of caution for companies experiencing the boom now. He says that when plenty of investment comes in, huge wage increases happen in the anticipation of a glorious future. “Some of it is going on in India now. But as the wave turns and technology matures, they no longer give in to these 10-20 per cent automatic increases in a year. Then the social crisis starts,” he says. (IT companies, please note.)

He also draws attention to the loss of jobs and how entire roles get phased out when a technology wave is unleashed. For instance, in the first revolution, among jobs that vanished were those of weavers, spinners, hand weavers, scribes at a mass level. There is, of course, resistance. Apparently, scribes fought for over 30 years to prevent the printing press from being set up in Paris. (For those who have seen the battles waged by unions against computerisation, that must have a familiar ring.)

Similarly, in another revolution, with the development of chemistry came synthesised medicine. So you don’t need to grow some rare extract just in Ooty or South America and medicines suddenly become cheap. A number of jobs are challenged.

Balakrishnan draws attention to the ongoing tussle between capital on the one side and doctors on the other, in the US. Healthcare reforms have seen doctors moving from being independent professionals to becoming employees of healthcare companies. He says with just a tinge of regret, “Twenty-five years ago, 80 per cent of American doctors were general practitioners. That’s come down to 10 per cent. Today, we are all employed by various people.”


So where does he think the big change would happen next? Balakrishnan names two places where it could come about immediately — healthcare and law. He says with feeling, “I think the Internet has just only found its early frivolous application — boy meets girl on Facebook and the human need to connect. The really big things will come in healthcare, education, legal services — the way law enforcement is delivered.”

He cites an example of how information technology can revolutionise healthcare. Today, for a cancer patient, the only option is to undergo many diagnostic tests and consult a costly specialist. But interesting experiments are under way on whether machines can replace the diagnostic abilities of doctors.

Machines are being programmed to look at, say, 10,000 scans of patients which appear to indicate cancer and 10,000 scans where it doesn’t look like cancer. Machines are able to replace the knowledge that now resides only with the doctor. Machine learning is what is needed, he says.

How about law? Where will the tech revolution make an impact here? His answer: decision making will get faster. The era of instant judgment may come. Using a device, the judge can have assistants look through all precedents, similar cases and judgments, and just use the power of the machine to deliver quicker justice. This will revive people’s faith in the legal system, he says.

One wonders what will then happen to specialists. If knowledge does get commoditised, what is the incentive for anyone to study?

Balakrishnan responds, “Knowledge will not be commoditised. What’s happened is that some professions that are highly paid have mastered the tacit part of the knowledge — the unwritten knowledge of judgments, that is, legal cases or medical cases — which is maintained as a secret, the tacit part. Technology just makes that explicit — it will take care of 98 per cent of routine things that happen. Human beings will pursue the next level of knowledge. So in legal cases, for instance, judges have to focus on the social justice part of issues — has it been fair? Today, many people don’t have the time or the energy for that.”

Published on November 09, 2012

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