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RISC Presentation at ISB



Presentation made at the Indian School of Business on 9th March, 2007 at the Global Social Venture Competition

Presentation made at the Indian School of Business on 9th March, 2007 at the Global Social Venture Competition



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    RISC Presentation at ISB RISC Presentation at ISB Presentation Transcript

    • Business Strategies for Inclusive Growth RISC – Rural Infrastructure & Services Commons Dr. Atanu Dey Chief Economist NetCORE Solutions Pvt Ltd, Mumbai
    • The Big Questions
      • Where’s India today?
      • Where should it be in 2020?
      • How do we get there?
    • Who are you?
      • Where do you live?
      • What do you do?
      • How much do you earn?
      • You are exceptional
    • The Present India
      • Rural areas mostly
        • 600,000 small villages
        • 700 million people
      • Village-centric agriculture related economy
      • Guaranteed low productivity and income
    • A Choice of Futures in 2020
      • Hundreds of millions living in hundreds of thousands of small villages, engaged in subsistence agriculture?
      • OR
      • Living in a large number of medium-sized cities, engaged in non-agricultural sectors?
    • Development and Growth
      • Economic development is distinct from growth
      • You can have one without the other
      • Economic growth necessary for development if per capita GDP is low
      • India needs economic growth
    • Urbanization and Growth
      • Urbanization is both cause and consequence of economic growth
      • Cities are Engines of Growth
    • Engines of Growth
      • Economies of scale, scope, and agglomeration
        • Infrastructure has high fixed costs
      • Range of economic services
      • Aggregation of people
        • Specialization and division of labor
      • Increased productivity
        • Lowered transaction costs
    • Rural Development
      • Rural area development
        • Barking up the wrong tree
        • Village-centric development wrong
        • 600,000 is a large number
      • Rural people development
        • Urbanize the people
    • India’s Development
      • Development of rural people
      • Economic growth of India
      • Urbanization of India’s population
      • Rural – urban migration impossible
        • Megaslums
      • Creation of the Engines of Growth
    • Urban Development
      • Development of rural populations depends on urban development
      • Urban planning is the key to rural development
      • Time to let go of our fascination with village-centric development
        • We aren’t that rich!
    • India—Land of Opportunities
      • Build cities from scratch
      • Engage the enormous human resources
      • Take the best from lessons learnt by others anywhere
      • Use the best state of the art technology and know-how
      • Build for the future
      • Urbanizing 600 million people
      • 600 new large cities of one million people each
      • Building houses, schools, shopping centers, parks, factories, roads, public utilities, hospitals, libraries . . .
      • Using the best urban planning known to humanity
    • UDLG
      • Urbanization Demand Led Growth
      • Similar to “ADLI—Agriculture Demand Led Industrialization” – Irma Adelman
      • Increases aggregate demand for goods and services for building cities
      • Provides a migration path for labor released from agriculture
    • Organic Growth of New Cities
      • Using best urban planning
      • Seed the cities
      • Use the best “DNA” evolved so far
      • Nurture the seed for a time-being
      • Allow the “tree” – the city – to grow and evolve over one generation
    • RISC – The Seed
      • Why RISC
      • What is the structure
      • How it will be implemented
      • The Business Model
    • Why RISC
      • People need life and livelihood services
        • market access, educational, health, financial, entertainment, transportation, and communications
      • Services require infrastructure
      • Infrastructure investment is lumpy
      • Infrastructure investment requires coordination
      • Coordination failure at the heart of growth
    • Structure of RISC
      • Two levels – Infrastructure and Services
      • Infrastructure Level at the bottom
        • Building, power, telecom, air conditioning, water, etc
        • Coordinated investment by a small set of large infrastructure providers
        • Income from User Services Providers
      • Services Level above the I-level
    • User Services Level
      • Uses the infrastructure services below it and pays for the infrastructure use
      • Income from user fees for services
      • Market demand driven set of services
      • Services income-generating
      • A complete set of services commercially viable
      • Large number of services
    • The Users
      • RISC located on the site of a “future city”
      • Within “bicycle commute” distance of about 100 villages
      • Aggregate population served – 100,000
      • Aggregated demand for services makes service provision commercially viable
    • The Growth of RISC
      • Users gradually migrate to settle around the RISC
      • The “city” develops according to the urban-planning blueprint
      • RISC is the catalytic agent which transforms the rural landscape
    • Economies
      • Scale
        • At the services level
        • At the infrastructure level
      • Scope
        • Complete set of services
        • Mutual support
      • Agglomeration
        • Urbanization economies
    • RISC Features
      • Ecological set of services determined by the market
        • Provided by private, public and NGOs
      • Small set of infrastructure providers
        • Large aggregate volume of infrastructure
      • RISC is an aggregation model – supply as well as demand
    • The Business Model
      • Initial infrastructure investment made with long planning horizon by a small number of private and public organizations
      • Large amount of marginal land acquired at low prices
      • RISC implemented
      • Land value increases due to improvements
      • Investment recovered over the long term
    • The Trick
      • Grow cities by planting RISCs
        • Spread risk
      • Transform marginal rural land into urban land
      • Recover the investment
      • No government funding required – only light-handed regulation
    • The Vision
      • To look beyond the here and now, and envision the future
      • Bold, coherent, inspiring and realistic vision of the future
      • Not the India of today but one of endless opportunities
      • That vision to guide our purposeful actions
    • Thank You!
      • Atanu Dey
      • [email_address]
      • Blog:
      • www.deeshaa.org