Role of Innovation, Entrepreneurship & Technlogy in India's Development Journey


Published on - 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.

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Role of Innovation, Entrepreneurship & Technlogy in India's Development Journey

  1. 1. Role of Innovation Entrepreneurship and Technology in Innovation,India’s Development JourneyAshok Jhunjhunwala, IIT Madras 7 November 2011 ValueX India 1
  2. 2. India’ Recent Development JourneyIndia Stages and Dilemma ◦ 1980 – 2005 India breaks the shackles 2005: I d b k h h kl  Accelerates economic growth ◦ 2003 onwards: Inclusive Development  Problems of inclusiveness, governance ◦ Future: What is Development?  Is it all about higher and higher consumption? How does Innovation, Entrepreneurship and Technology help us in this journey? 7 November 2011 ValueX India 2
  3. 3. I.I India breaks the shackles 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  So did getting a $3 microprocessor chip 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  Technology level: to make products affordable to Indians  Operations level: organizations / business which can scale  Policy level: to help business work 7 November 2011 ValueX India 3
  4. 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 10N 0 Year < 6K 9K 19K 33K 62.5K >83K HH Income in Rs /month Rural Household Income Urban Household Income
  5. 5. Mobiles boomed at right price point 900 Not until 850 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 90’s when TV prices became Rs1200 onwards and cable TV tariff fell below Rs75 per month •Entertainment industry in India one of the biggest 7 November 2011 ValueX India 5
  6. 6. India on Move Airline Industry is booming : passenger capacity multiplies ◦ Average tariffs have fallen to a fourth: affordable to middle class Indians g  Inspite of rising petrol prices 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 India’s cement plants in 90’s virtually closed as they could not compete ◦ Today India has some most energy efficient plants of the world India’s wind energy company is the fastest growing one in the world Indian I d companies carrying out successful Drug discovery f lD d ◦ Spends USD50-70M as opposed to USD800M for a drug 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. 7. Engineering Education 1.7 M engineering students graduate every year from 3800 engineering colleges  Up from 25,000 in 100 schools in early eighties ◦ Uneven quality is a major challenge  Balancing Quantity, Quality and Equity (inclusiveness) But it is this human resources which has driven growth 7 November 2011 ValueX India 7
  8. 8.  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. 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 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. 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) Media reaches villages and g 300 Incomes in thousand Ruppes s shows the urban-rural 250 disparity everyday 200 150 100 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 Government reacts: make 50 social programs its primary 40 emphasis 30 1993-94  Ahead of infrastructure for growth 20 2004-05 ent  NREGS, NREGS NRHM 10 2009–10 2009 10 0 Q5 Q4 Q3 Q2 Q1 top 20 percentile to bottom 20 percentile
  11. 11. Indian entrepreneurs Responds Innovatively  Entrepreneurship using ICT  Rapid development in 20th centuries: due to outsourcing of manufacturing and services a u actu g a se v ces  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  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. 12. Outsource Manufacturing to villages Manufacturing contracts not involving heavy machinery and large power ◦ Advantageous if some raw materials are from villages 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. 13. Remote Eye Care Vet care with Veterinary collegeStrengthening Health Care: Telemedicine Vid Video C f Conferencing f eye-care and with V i i i for d i h Veterinarian Telemedicine kit of Rs25K enables remote heart-beat, temp, ECG meas. Focus on Village Health Practitioners: Training, Medicine Basket, Referral Innovative use of Mobiles for health-delivery 7 November 2011 ValueX India 13
  14. 14. Agriculture: Pictures sent to the experts at Madurai Agricultural Managing Risks for farmers g g College: diagnosed it as “Yellow Mosaic Before disease” Okra crop After turning white Crop disease: video conferencing to connect to an agricultural Expert ◦ Obtaining answers before it is too late Rain-fall insurance ◦ Micro-weather Measurement and prediction  Collect Temperature, humidity, pressure, wind speed, wind direction and rainfall at each village  Weather Monitoring Station : Rs20K 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. 15. Creating Markets for Rural Products, but driven by Mobile Voice7 November 2011 ValueX India 15
  16. 16. Making Affordable Finance Available in Rural India• Mobile Banking can reach most rural customers – as most villagers are illiterate or semi-literate • Voice based Mobile Banking in local language / dialects also used for • Using voice-recognition and voice-authentication technologies • Agriculture • Healthcare Information- I f ti on-demand • Livelihood • Education Pul Data /Form l filling Transactions Voice• multi‐lingual Authentication• Personalized Push• Guided  Feedback/ conversation surveys• Natural Voice Natural Voice  Interactions Alerts/Updates
  17. 17. and for cash-in / cash-outs cash- cash- Low-cost Rural ATMs ◦ Price point of one fifth of regular ATMs ◦ Solar-Powered  a fifth of regular ATM power ◦ Cash-ins being incorportaed g p GramaTeller 7 November 2011 ValueX India 17
  18. 18. Powering Rural India 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 Requires Decentralized Power Generation ◦ At village level (25 to 100 KW Generation & Distribution) ◦ At home / enterprise levelwith 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  DC motors are 2.5 times more energy efficient as compared to AC motors  All electronics use low-voltage DC ◦ Solar powered Cellular Base Station ◦ Solar water-pumps 7 November 2011 ValueX India 18
  19. 19. II. Governance: India’s current dilemma India s Corruption and collusion between p business, politics, bureaucracy, media and unions Can Technologies be used to overcome corruption? ◦ In 80’s middle-class India was tired of corruption in train reservations and felt harassed ◦ Computerized train reservation largely overcame this IT can be used to enable transactions with government ◦ e-Governance can indeed reduce harassment, corruption and Cash transactions are key drivers of black money ◦ Can electronic transactions replace cash transactions  But not everyone has computers and Internet ◦ They have mobiles  Can Mobile Payment enable micro-payments? 7 November 2011 ValueX India 19
  20. 20. III. But can we all continue to “Grow?” Grow? India consumes ◦ Less than a fifteenth of per capita resource as compared to that in the West  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 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 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 And yet, India and China can not be asked to wait to get out of their deprived state 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. 21. Revitalize Rural Areas While India consumes 1/15 per capita as compared to West ◦ Rural India consumes one fifteenth per capita as compared to Urban Need to fix rural India so that people choose to stay there p p y  With health, education, a bit of infrastructure and livelihood opportunity, life in Rural India may be better than in urban areas Need N d to redefine development d fi d l ◦ Not accept the Industrial Revolution Development paradigm  More one consumes, better it is for economy  Technology can find all the answers  Urban life is better life Good life need not imply such large consumption 7 November 2011 ValueX India 21
  22. 22. To Sum Up 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 Technology, Innovation, Entrepreneurship, Talent and Values will guide overcome challenges 7 November 2011 ValueX India 22