http://valuexindia.com - On day 1 of VALUEx India 2011, the group heard from Dr. Ashok Jhunjhunwalla. Dr. Jhunjhunwalla is a professor at the world renowned Indian Institute for Technology (IIT) and is a leading authority and speaker on the subject of rural business opportunities in emerging India.
During his presentation, Dr. Jhunjhunwalla challenged participants to take a local view towards the Indian economy. Dr. Jhunjhunwalla discussed ways to make growth more inclusive and leveraging not only the consumption power, but also the production and manufacturing potential of rural. Stressing the need to redefine development, and not accept the western Industrial Revolution Development paradigm, Dr. Jhunjhunwalla detailed key challenges in Indian governance, equality in quality of education. The key takeaway was that there is tremendous opportunity with its fair share of challenges in India, and specifically rural India. Additionally, Dr. Jhunjhunwalla stressed that one cannot project the growth and development model of western nations onto India. The model has to be specific to India and address the challenges that India faces.
Role of Innovation, Entrepreneurship & Technlogy in India's Development Journey
1. Role of Innovation Entrepreneurship and Technology in
Innovation,
Indiaâs Development Journey
Ashok Jhunjhunwala, IIT Madras
Jhunjhunwala
ashok@tenet.res.in
7 November 2011 ValueX India 1
2. Indiaâ Recent Development Journey
India
ï Stages and Dilemma
⊠1980 â 2005 India breaks the shackles
2005: I d b k h h kl
ï Accelerates economic growth
⊠2003 onwards: Inclusive Development
ï Problems of inclusiveness, governance
⊠Future: What is Development?
ï Is it all about higher and higher consumption?
ï How does Innovation, Entrepreneurship and
Technology help us in this journey?
7 November 2011 ValueX India 2
3. I.
I India breaks the shackles
ï In eighties
⊠One waited eight years to get a telephone
⊠Four years to buy a two-wheeler
⊠LPG gas cylinder: forget about it
⊠Importing a PC: one year to get custom clearance
ï So did getting a $3 microprocessor chip
ï At some point India got going
p g g g
⊠Learned that India is a large market, but at the right price point
⊠Entrepreneurship is the best and fastest driver of development
⊠Innovation and technology can be used to make changes in India
gy g
ï Technology level: to make products affordable to Indians
ï Operations level: organizations / business which can scale
ï Policy level: to help business work
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4. and Indian changed: 65M urban homes
25
21.2
2001
Num ber of HH in m illions
20
15.8
15 12.8
12 8
10
5.8
5 3.2
2
0.8 0.9
N
0
5 9 13 18 26 42 65 175
HH Income in thousand Rs/month
30 Yearly Household Incomes in Rs '000
25
25.24
2007 (inflation adjusted to 2004 prices)
Number of HH in millions
300
Incom in thousand Ruppes
20 250
16.87
16 87
R
200
15 150
10.25 100
10 7.84
50
5 0
mes
2.27
1.19
1 19 1993-94
1993 94 2004-05
2004 05 2009-10
2009 10
N
0 Year
< 6K 9K 19K 33K 62.5K >83K
HH Income in Rs /month Rural Household Income Urban Household Income
5. Mobiles boomed at right price point
900
Not until
850
ï 800
Subscribers
⊠Infra Capex < Rs3K/ line 700
in million
630
⊠Tariff < 50 p/minute 600 392
⊠ARPU = Rs100/month 500
270
⊠15+ million subscribers 400
158
added each month 300
97
200
51
100 33
4 7 13
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Just Like number of TVs in India rose from 10
million to 100 million in 90âs when TV prices
became Rs1200 onwards and cable TV tariff fell
below Rs75 per month
âąEntertainment industry in India
one of the biggest
7 November 2011 ValueX India 5
6. India on Move
ï Airline Industry is booming : passenger capacity multiplies
⊠Average tariffs have fallen to a fourth: affordable to middle class Indians
g
ï Inspite of rising petrol prices
ï Auto Sector is booming
⊠R&D driven initiative: Scorpio and Tata-Indica and now Tata Nano
⊠India emerging as leader in auto-component design and manufacturing
ï Indiaâs cement plants in 90âs virtually closed as they could not compete
⊠Today India has some most energy efficient plants of the world
ï Indiaâs wind energy company is the fastest growing one in the world
ï Indian
I d companies carrying out successful Drug discovery
f lD d
⊠Spends USD50-70M as opposed to USD800M for a drug
ï India have started having IPR in next generation wireless standards
g g
⊠Can be amongst the leaders in wireless technology in 7 - 8 years
7 November 2011 ValueX India 6
7. Engineering Education
ï 1.7 M engineering students graduate
every year from 3800 engineering colleges
ï Up from 25,000 in 100 schools in early eighties
⊠Uneven quality is a major challenge
ï Balancing Quantity, Quality and Equity
(inclusiveness)
But it is this human resources which has
driven growth
7 November 2011 ValueX India 7
8. ï Growth of IT and IT enabled services is
legendary
l d
⊠Trillion dollar IT Services industry being
projected
The World is Flat
But you aint seen nothin yet
for the changes has not yet touched Rural India
7 November 2011 ValueX India 8
9. II. But is our Development Inclusive?
Rural India is still far behind (140M homes)
2001
120
102.1
N u m b er o f H H in m illio n s
ï Media
M di reaches villages and
h ill d 100
shows the urban-rural
80
60
disparity everyday 40
17
20 10
3.9 1.9 1 0.3 0.3
0
3 9 13 18 26 42 65 112
HH Income in thousand Rs/month
80
68.98
70 2007
60
ons)
48.53
Number of HH (Millio 50
40
30 25.03
20
10 3.78 2.15
2 15 0.92
0 92
0
< 6K 9K 19K 33K 62.5K >83K
HH Income in Rs / month
7 November 2011 ValueX India 9
10. II. But is our Development Inclusive?
Rural India is still far behind (140M homes)
Yearly Household Incomes in Rs '000
(inflation adjusted to 2004 prices)
ï Media reaches villages and
g 300
Incomes in thousand Ruppes
s
shows the urban-rural 250
disparity everyday 200
150
100
ï Indian democracy gives 50
t
opportunity almost every two 0
years for people to vote out 1993-94 2004-05 2009-10
⊠governments and policies which Year
leaves them behind
Rural Household Income Urban Household Income
⊠Singrurs / Naxalite movements
are a reflection of this
⊠Politically unsustainable Income Distribution in India
me
perce of total incom 60
ï Government reacts: make 50
social programs its primary 40
emphasis 30 1993-94
ï Ahead of infrastructure for growth 20 2004-05
ent
ï NREGS,
NREGS NRHM 10 2009â10
2009 10
0
Q5 Q4 Q3 Q2 Q1
top 20 percentile to bottom 20 percentile
11. Indian entrepreneurs Responds Innovatively
ï Entrepreneurship using ICT
ï Rapid development in 20th centuries: due to outsourcing of
manufacturing and services
a u actu g a se v ces
ï started with routine services, but the nations used this to
build skills and acquire business and technical leadership
⊠Can we now outsource manufacturing and services
to ill
t villages and generate wealth and confidence?
d t lth d fid ?
Outsource IT Services to Rural India
ï Enable technology to move
work to where people
are, rather than move
h h
people
⊠Can we have a 25 seater
BPO in each village
illa e
employing 50 people?
12. Outsource Manufacturing to villages
ï Manufacturing contracts not involving heavy
machinery and large power
⊠Advantageous if some raw materials are from villages
ï Distributed Garment
Manufacturing:
⊠Manufactures high quality
uniforms and Institutional Wear
⊠outsources to micro-
manufacturing units to rural India
7 November 2011 ValueX India 12
13. Remote Eye Care Vet care with Veterinary college
Strengthening Health Care: Telemedicine
ï± Vid
Video C f
Conferencing f eye-care and with V i i
i for d i h Veterinarian
ï± Telemedicine kit of Rs25K enables remote heart-beat, temp, ECG meas.
ï± Focus on Village Health Practitioners:
Training, Medicine Basket, Referral
ï± Innovative use of Mobiles for health-delivery
7 November 2011 ValueX India 13
14. Agriculture:
Pictures sent
to the experts
at Madurai
Agricultural
Managing Risks for farmers
g g College:
diagnosed it as
âYellow Mosaic
Before diseaseâ
Okra crop After
turning white
ï Crop disease: video conferencing
to connect to an agricultural Expert
⊠Obtaining answers before it is too late
ï Rain-fall insurance
⊠Micro-weather Measurement and prediction
ï Collect Temperature, humidity, pressure, wind speed, wind
direction and rainfall at each village
ï Weather Monitoring Station : Rs20K
ï Market risk: use of commodity
exchanges forward pricing and Options
⊠Can one get small farmers to use it?
7 November 2011 ValueX India 14
15. Creating Markets for Rural
Products, but driven by Mobile Voice
7 November 2011 ValueX India 15
16. Making Affordable Finance Available in Rural India
âą Mobile Banking can reach most rural customers
â as most villagers are illiterate or semi-literate
âą Voice based Mobile Banking in local language / dialects
also used for
âą Using voice-recognition and voice-authentication technologies
âą Agriculture
âą Healthcare
Information-
I f ti
on-demand âą Livelihood
âą Education
Pul Data /Form
l filling
Transactions
Voice
âą multiâlingual Authentication
âą Personalized
Push
⹠Guided Feedback/
conversation
surveys
âą Natural Voice
Natural VoiceÂ
Interactions
Alerts/Updates
17. and for cash-in / cash-outs
cash- cash-
ï Low-cost Rural ATMs
⊠Price point of one fifth of regular ATMs
⊠Solar-Powered
ï a fifth of regular ATM power
⊠Cash-ins being incorportaed
g p
GramaTeller
7 November 2011 ValueX India 17
18. Powering Rural India
ï Even most grid-connected villages have no power for 10 to 20 hours /day
⊠Villages can not have any production set-up without local power
g yp p p
ï Requires Decentralized Power Generation
⊠At village level (25 to 100 KW Generation & Distribution)
⊠At home / enterprise level
with falling solar-cell prices off-grid no-storage
DC Solar PV has reached grid-parity (Rs 5 p unit)
g p y( per )
⊠Storage will add Rs 15 per unit
⊠Feeding to grid (dc-ac conversion and synchronization) losses 30%
⊠Solar schools & homes: DC lighting, fans, refrigerator, appliances, electronics
ï DC motors are 2.5 times more energy efficient as compared to AC motors
ï All electronics use low-voltage DC
⊠Solar powered Cellular Base Station
⊠Solar water-pumps
7 November 2011 ValueX India 18
19. II. Governance: Indiaâs current dilemma
India s
ï Corruption and collusion between
p
business, politics, bureaucracy, media and unions
ï Can Technologies be used to overcome corruption?
⊠In 80âs middle-class India was tired of corruption in train reservations
and felt harassed
⊠Computerized train reservation largely overcame this
ï IT can be used to enable transactions with government
⊠e-Governance can indeed reduce harassment, corruption
ï and Cash transactions are key drivers of black money
⊠Can electronic transactions replace cash transactions
ï But not everyone has computers and Internet
⊠They have mobiles
ï Can Mobile Payment enable micro-payments?
7 November 2011 ValueX India 19
20. III. But can we all continue to âGrow?â
Grow?
ï India consumes
⊠Less than a fifteenth of per capita resource as compared to that in the
West
ï as per IEASD, India consumed 512.4 Kg of oil equivalent of energy per person as
opposed to 7794 Kg of oil equivalent per person in USA in 2003
ï If India and China grow like West?
g
⊠And their per capita resource consumption of 1.4 billion Chinese and
1.1 billion Indians reach even half the level in the West
ï Nature is already retaliating
N i l d li i
⊠This can not be our future
⊠Technology can help but cant support consumption beyond a point
ï And yet, India and China can not be asked to wait to get out of
their deprived state
ï AND they can not grow and acquire the same lifestyle as that of
the West
th W t
7 November 2011 ValueX India 20
21. Revitalize Rural Areas
ï While India consumes 1/15 per capita as compared to West
⊠Rural India consumes one fifteenth per capita as compared to
Urban
ï Need to fix rural India so that people choose to stay there
p p y
ï With health, education, a bit of infrastructure and livelihood
opportunity, life in Rural India may be better than in urban areas
ï Need
N d to redefine development
d fi d l
⊠Not accept the Industrial Revolution Development paradigm
ï More one consumes, better it is for economy
ï Technology can find all the answers
ï Urban life is better life
ï Good life need not imply such large consumption
7 November 2011 ValueX India 21
22. To Sum Up
ï Our post-independence challenges are many
⊠In first thirty years, we build our
Innovation, Technology and entrepreneurship
capabilities
⊠Then we accelerated our economic growth
⊠Currently coping with inclusion and governance
agenda
⊠Soon we have raise civilizational issues
ï Technology, Innovation, Entrepreneurship, Talent
and Values will guide overcome challenges
7 November 2011 ValueX India 22