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The Oxford dictionary (Oxford University Press 1989) define the word ‘urban’ as “relating to a city
or town” and the word ‘rural’ as “relating to the countryside rather than the town”. In the “United
Nations (UN) World Urbanization Prospects (WUP), The 2014 revision” (UN 2014) it is claimed
that “national statistical offices are in the best position to establish the most appropriate criteria to
characterize urban areas in their respective countries” and ‘rural population’ is associated to the
“difference between the total population and the urban population” and “refers to people living in
rural areas”. Based on the WUP, the World Bank (2014) mentions “urban population […] is
calculated using World Bank population estimates and urban ratios from the United Nations World
Urbanization Prospects” and “rural population […] is calculated as the difference between total
population and urban population.” Viktoria Hnatkovskaa and Amartya Lahiri (2013) described the
urban-rural divide by taking into account and studying between 1983 and 2010 four points they
considered relevant to understand the differences between urban and rural areas: the education
attainments levels, the occupation choices, the wages and the consumption expenditure of Indian
workers. Sneh Sangwan and Randhir Singh Sangwan (2003) focused their attention on the fact we
live in societies in transition with changing spatial pattern of social variables which can be assessed
through the evolution of the rural and urban society in India over time (Census of India 2001;
Government of India, 2006; Census of India 2011; Chandramouli, 2011; Government of India,
2013; WorldBank, 2014).
Chrisanthi Avgerou (2008) explained how emerging countries have attempted to get benefits from
ICT usage. She identified three discourses on IS implementation in developing countries (ISDC):
the transfer and diffusion discourse, the socially embeddedness discourse action and the
transformative discourse. Tripathi, Singh and Kumar (2012) depicted the impacts of ICT on
livelihood assets by categorizing them as human, natural, financial, social and physical assets. The
link between ICT growth and economic growth is explored by Maximo Torero, research fellow at
IFPRI, and Joachim von Braun, director general of IFPRI, who wrote a brief (2006) in order to
understand whether and how ICT could play a role in providing pro-poor services and fostering
their development even if many prerequisite must to be put in place. More precisely, Robert
Chapman and Tom Slaymaker (2002) investigated the potential role of ICT in rural development by
highlighting the constraints and opportunities faced to their application. In We the Peoples: A Un
for the Twenty-First Century (2000), the Former United Nations General-Secretary Kofi A. Annan](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-14-2048.jpg)
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argues and confirms: “The information technology sector, in short, can transform many if not most
other sectors of economic and social activity” (p. 34).
The trend and pattern of growth of the ICT industry in India, such as the e-governance situation and
the teledensity variation across various Indian states, is more carefully analyzed by Varma and
Sasikumar (2004) who explain that “many studies have confirmed the positive pay offs of IT in
enhancing growth and development” (p.22), but that the “major impediment for ICT diffusion [in
India] is the lack of sufficient infrastructure” (p.32). Kurukshetra (Vol. 60, January 2012), a journal
on rural development, investigates the role of ICT in rural development of India through the
contribution of several authors: Gulati, Hazra, Kameswari, Sanyal and Raheem. Chitla (2012) as
well as Kumar and Singh (2012) wrote a paper to point out how ICT initiatives are capable of
development in rural India. More specifically, Makitla, Herselman, Botha and Van Greunen (2010)
published a paper on the mechanisms that facilitate delivery of digital content and services to
resource constrained communities through any access-technologies and devices available to the
end-users.
However, the key of success for ICT4D in rural India is to succeed first in bridging the digital
divide (Wade, 2002; Baskaran and Muchie as editors, 2006; TechTarget, 2014), which can be
structured into 4 levers (Bracey and Culver 2005; Tongia 2006; Makitla and al, 2010): awareness,
availability, access and affordability. Rao (2005) explained the digital divide arising from the use of
ICTs that occurs in India by discussing different aspects of Indian infrastructures such as electric
networks, IT, internet penetration and teledensity. He enlightened that the urban-rural divide could
partially explain the digital divide. However, he also pointed out that some Indian states are more
digital than others and there are caste, gender, educated–uneducated and rich–poor divides that
could also justify the “national digital divide“. The relationship between the digital divide and the
urban-rural divide is also considered by Mathews (2001) who showed in urban areas there is a
heavy concentration of ICTs, while in rural areas people cruelly lack access to ICTs which give rise
to development issues. More specifically, the internet’s impact on India, the challenges for building
a stronger internet ecosystem and the actions required to bridge critical gaps in the Internet
ecosystem were discussed in the report written by McKinsey & Company, Inc. (2012). Tongia,
Subrahmanian and Arunachalam (2005) also looked at the features of digital divide, the challenges
encountered in bridging it and the role ICT can play at answering Millenium Development Goals](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-15-2048.jpg)
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3. ICT in India
3.1 Introduction to Information and Communication Technology (ICT)
ICT is the means, either as softwarei
or hardwareii
technology, for “creating, storing, processing,
disseminating and exchanging information” (Heeks, 2002; UNDP, 2001, cited by Mukerji, 2013).
The online TechTarget defines the different types of technologies ICT concerns, claiming that it
“[…] is an umbrella term that includes any communication device or application, encompassing:
radio, television, cellular phones, computer and network hardware and software, satellite systems
and so on, as well as the various services and applications associated with them, such as
videoconferencing and distance learning”. Tim Unwin (2009, p. 77) also adds, by citing Weigel and
Walburger (2004, p. 19), ICT is a used terminology to refer “to technologies to access, process and
transmit information […]”. These technologies can be separated into areas which are telephony,
broadcast media, and audio-visual processing and transmission systems (FOLDOC, 2008).
Michiels and Van Crowder (2001) defined ICTs “as a range of electronic technologies which when
converged in new configurations are flexible, adaptable, enabling and capable of transforming
organizations and redefining social relations”. They also mentioned the existing “convergence
between the new technologies and conventional media” (Michiels and Van Crowder, 2001, p. 8) so
that the new digital technologies can share and exchange information on different devices and
multiple media (cited by Chapman and Slaymaker, 2002, p. 1) thanks to the emergence of the
World Wide Web and the development and democratization of the digital technologies (Labelle,
2003, p. 1).
With the emergence of the internet and the related digitization of information towards the later part
of the 1980’s, the term ICT was first used by academics and researchers, increasing in popularity
with applications by modifying and mediating the relationship between men and machines. The ICT
revolution was launched, where Consumers-to-Consumers (C2C), Business-to-Consumers (B2C),
Government-to-Business (G2B), Business-to-Government (B2G), Business-to-Partners (B2P),
Partners-to-Business (P2B), Business-to-Enterprise (B2E), Government-to-Citizen (G2C) and
Citizen-to-Government (C2G) relationships are therefore facilitated (Baffour Kojo and Lu, 2003;](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-19-2048.jpg)
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Malhotra, Chariar, Das and Ilavarasan, 2007; Mukerji, 2008; Schware, 2009; Chitla, 2012;
McKinsey & Company, Inc., 2012). Nowadays, ICTs are pervasive by nature and resulting
applications emerge in different organizations and processes progressively “leading to reduction of
processing time, lower transaction costs, lower inventory costs and less material” (Mody and
Dahlman, 1992, cited by Maitrayee Mukerji, 2013). It has become a pillar of the modern knowledge
society as ICT connects people together and provides e-services relying on improving the
information transfer (Kramer, Jenkins and Katz, 2007).
Furthermore, ICT can also been considered in terms of opportunities to ‘leapfrog’ technology
emerging and poor countries left behind use, in order to drive development and ‘catch-up’ the
developed countries (Mukerji, 2013). In this particular case, the term ‘ICT for Development’
(ICT4D) is more appropriately used. In that sense, many initiatives, notably the Global Knowledge
Initiative (founded in 1997), the UN ICT Task Force (established in 2000), the DOT-Force
(launched in 2000) and the World Summit on the Information Society (hosted by the International
Telecommunication Union in 2003 and 2005), have actively built “[…] partnerships between civil
society, the public and the private sectors to harness ICTs for development” (Chapman, Slaymaker
and Young, 2003, cited by Grimshaw and Kala (eds.), 2011, p. 2).
3.2 The 4C’s framework
ICTs can be studied and evaluated on the basis of a 4C’s framework (Bracey and Culver, 2005;
Tongia, Subrahmanian and Arunachalam, 2005):
1. Computing: Computers are expensive to acquire; this implies that shared access like
cybercafes or ICT-enabled kiosks, and mobile technology such mobile phones can be good
financial alternatives, especially in developing and emerging countries.
2. Connectivity: The mobile telephony and internet are increasingly used and available
everywhere over the globe, even if network coverage is, for the most part, limited to urban
areas and the data connectivity remains poor and expensive.
3. Content: Content does not exist in every language and information systems that provide
exhaustive content require multimedia which require broadband connectivity.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-20-2048.jpg)
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4. The ICT Price Basket (IPB): The IPB combines fixed, mobile and broadband tariffs for 2008
into one measure and compares it across countries. (ITU, 2009)
5. The ICT Development Index (IDI) – formerly the ITU-OI: The IDI captures the level of
advancement of ICTs in more than 150 countries worldwide and compares progress made between
2002 and 2007. It also measures the global digital divide and examines how it has developed in
recent years (ITU, 2009).
I chose to focus a little more on the last Index, the ICT Development Index (IDI), and decompose it
in the case of India, for comparison with the rest of the world. You can find all the results from ITU
(2009) in the appendix of this work. The International Telecommunication Union (ITU) introduced
the ICT Development Index (IDI) “[…] as an indicator of countries’ level of ICT development”,
more especially to “measure the digital divide between countries and assess countries’ ICT
Figure 3 - 2007 ICT Opportunity Index: sub-indices and indicators (ITU, 2007)
Figure 4 - IDI and ICT Price Basket
comparison (ITU, 2009)
Figure 5 - Top ten economies - broadband
Internet sub-basket (2008) (ITU, 2009)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-23-2048.jpg)
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3.4.4 The resulting digital divide
Mita Bhattacharya and Graham Vickery (2008) wrote a report on the performance, growth and the
key challenges of the ICT sector in India. Their work confirmed that even though India benefits
from a huge high-skilled manpower in ICT and the hardware and electronics segment has started to
pick up, a big part of the Indian population is still illiterate, IT awareness is always low, R&D
spending should be increased for benefiting both the IT services and hardware, content creation and
data availability should increase for benefiting the private sector and the public sector (through e-
governance) and finally better evaluations should be pursued in order to set up good practice in
policy design and delivery. The huge challenge of ICT in India certainly results from the urban-
rural divide and its underlying socio-economic features, previously depicted, which make there
exists a consecutive and significant digital divide between urban and rural areas.
The digital divide is an inequality related to access to, use of and knowledge of ICTs by people and
“[…] is related to social inclusion and equality of opportunity” (Bhatt, 2006, p. 33). This divide can
be the symptom of other divides as it indirectly and reciprocally engenders a differential treatment
between citizens or areas according the fact they are in different socioeconomic, sociocultural or
even demographic categories (Tongia, Subrahmanian and Arunachalam, 2005).
In that sense, it can be depicted into several forms as the TechTarget online dictionary17
(accessed
the 10th
November, 2014) shows:
The digital divide typically exists between those in cities and those in rural areas; between
the educated and the uneducated; between socioeconomic groups; and, globally, between
the more and less industrially developed nations. Even among populations with some access
to technology, the digital divide can be evident in the form of lower-performance computers,
lower-speed wireless connections, lower-priced connections such as dial-up, and limited
access to subscription-based content.
Similarly, the dichotomy ‘technology haves’ and ‘technology have-nots’ is often used to refer “[…]
to the gap between demographics and regions that have access to modern information and
17
http://whatis.techtarget.com/definition/digital-divide](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-36-2048.jpg)
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4. Bridging digital divide and driving development
As we previously pointed out, rural areas of India lag behind urban areas as they do not have the
infrastructure available, accessible, and affordable enough to provide access to and use of and
knowledge of information and communication technologies. In that sense, there is a social
inequality between urban and rural areas that is called digital divide. Subsequently, rural India is
somehow excluded and marginalized from the socio-economic development of India. Bridging the
digital divide is a first step necessary to overcome before trying to drive development through ICT.
Since the 2000's, there has been a huge international debate on the impact ICT could have on the
productivity and the growth. Most of the results and conclusions which emerged from that debate
converged to admit there was a positive effect resulting from ICT, so that it could be an interesting
driver for developing country. The others, more skeptical, summarized their position as follows:
“you can’t eat computers” (Steinberg, 2003, cited by Kendall and Singh, 2006, p. 1). Indeed, for
developed countries, where critical infrastructures and institutions existed, studies found out
positive productivity impacts of ICT at the micro-level and aggregate level, while for developing
countries, especially BOP markets where infrastructure were poor and institutions were weak
(Tarafdar and Singh, 2011), there was still low evidence. However, Kendall and Singh (2006, p. 1)
admitted: “Nevertheless, there are many situations where IT can deliver real benefits and cost
savings either as an alternative, or as a complement to physical infrastructure development.” In that
sense, ICTs were considered by many as an “inherently enabling metatechnology that [could]
bypass or leapfrog institutional and infrastructural obstacles” (Wade, 2002, p. 460).
Tripathi, Singh and Kumar (2012, p. 825) defined five livelihood assets which ICT could impact:
1. Human capital: Enhanced access to education though distance-learning applications and
tools and more adapted and appropriate services for local communities (regarding their
language and culture).
2. Natural capital: Updated natural resource records such as land, cool etc. and appropriate
decision making thanks to facilitated communication with stakeholders (state, landowners,
etc.).](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-44-2048.jpg)
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Indian villages have today the opportunity to get connected to the whole country by broadband and
internet telephony (Voice over Internet Protocol – VoIP).
The trend and pattern of growth of the ICT industry in India, such as for instance the numerous e-
governance initiatives which emerged and the positive teledensity variation across states of India, is
however more carefully analyzed by Varma and Sasikumar (2004) who explain that “many studies
have confirmed the positive pay offs of IT in enhancing growth and development” (p.22), but that
the “major impediment for ICT diffusion [in India] is the lack of sufficient infrastructure” (p.32).
As explained in Making ICT infrastructure, appliances, and services more accessible and
affordable in rural areas (Barrett and Slavova, 2011), ICTs have definitely played a positive impact
on income growth in developing countries (Röller and Waverman, 2001; Waverman, Meschi, and
Fuss, 2005; cited by Barrett and Slavova, 2011). ICTs generate new income channels and increase
the quality of life in rural areas (Goyal 2010; Jensen 2007, cited by Barrett and Slavova, 2011).
Therefore wider access to and bigger use of ICTs throughout India should certainly reduce
inequalities in income and quality of life between rural and urban areas (Barrett and Slavova, 2011).
4.1 How to bridge digital divide?
There are challenges and opportunities to bridge the digital divide in India, in the sense it could
reduce the gaps or inequalities between the “haves” from urban areas and the “have–nots” from
rural areas, in order to access ICT. Filling up the existing digital divide we explored in the previous
section needs measures of change in the 4Cs Framework to be considered. Moreover, the ICT
policy is very important and should be considered as well. Therefore, it constitutes the fifth point of
this section.
4.1.1 Computing
As rural people are very poor, it is necessary to develop technology cheap enough and effective at
the same time in order to make rural access to ICT possible and robust. An individual and low cost
solution (personal mobile phone) compared to an individual and unaffordable cost solution](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-46-2048.jpg)
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hardware industries by restricting with high tariffs competitiveness and growth: Import tariffs were
high (135% on hardware and 100% on software) (Dossani, 2006, cited by Bhattacharya and
Graham, 2008, p. 9).
The Government of India played a key role in the sense it became a facilitator of the IT industry
instead of just being a regulator of IT goods and services (Evans, 1992; Heeks, 1996, p. 50, cited by
Mukerji, p. 34). Therefore, the Government of India facilitated provision of private investments (IT
sector and physical infrastructure), increased human capacity (focus on computer science in the
school system for manpower development), and computerized its administration and tax incentives.
The National Taskforce on Information Technology and Software Development (NTITSD) was at
that time established (1998) in order to establish long-term plans for driving growth in the IT sector
by enabling the private sector to be in a good position to become competitive internationally on the
software market (Bhattacharya and Graham, 2008). Competitive advantages targeted technically
qualified talents, speaking English, with low-labour costs and more competitive work conditions.
There resulted from these public actions growth of the software industry on total GDP of the
country and increased employment opportunities in the sector, even though the domestic economy
did not directly benefit from the value creation as the sector was essentially working as international
software outsourcer and therefore exported the value created outside India (Mukerji, 2013). On
Figure 16 (% value-added per sector on total GDP), section 3.4.2, you see how the services sector
(mostly impacted by the software industry) is still growing compared to the rest of the economy
since now more than one decade at constant around 10% percent growth rate per year.
However, the flip side of these generous facilitations and incentives to the private sector to invest
and set up software firms in India resulted in “[…] short-run manpower deficit in the other sectors”
and the public sector had invest too much energy and funding in doing that, it couldn’t help other
sectors of the economy by investing once again in resources and capabilities. This is certainly the
reason why the industry has never really grown up in terms of value-added on total GDP of the
county compared to another emerging country, China, with some similar features (more than 1
billion people) but with a more important value-added industry sector.
ICT policy in India has also been declined in the states of the country with diverse outcomes: Some
states did succeed to benefit from the ICT policies, while others did not really benefit from the](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-49-2048.jpg)
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situation. Nevertheless, differences between urban and rural areas remained and even increased as
the ICT investments from the private sector were carried out in urban areas since there was
infrastructure and institutions there. Therefore, the focus of the government ICT policies did not
consider IT for rural development at that time, except maybe concerning some states, like Kerala
for instance, which pursued own state policies for empowering their rural population in some areas
like health, education, e-governance, etc. (Mukerji, 2013)
In 2000, the Ministry of Information Technology has been finally created and a Task Force on
Human Resource Development has been asked for thinking at “[...] long-term strategies to increase
the number of well-trained IT professionals.” (Bhattacharya and Graham, 2008, p. 9) Moreover, the
Education and Research Network (ERNET) has been implemented to connect universities and
regional engineering colleges (RECs), in order to decrease still more IT-related customs duties and
to make possible 100%; it resulted to the Information Technology Act, 2000 (Ibid.)
As the Government of India realized the digital divide it was creating between urban and rural areas
with huge ICT sector development and resulting socio-economic impacts in urban areas compared
to the low ICT penetration, access and use in rural areas, it decided to create the Working Group on
Information Technology for Masses, in order to consider how ICT could be used to empower rural
India, so that ICT would reach all parts of the country. There resulted from it the creation of a
comprehensive policy framework, whose one goal was precisely to achieve `IT for All´ with wider
diffusion and universal access to ICT (Baskaran and Muchie, (eds.), 2006)
Figure 27 - From push to pull strategies (ICTlogy, 2008)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-50-2048.jpg)
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4.2 ICT for Development (ICT4D) vs. ICT and Development (ICT-D)
There is a difference between ICT4D and ICT-D, as they depict two perspectives that Maitrayee
Mukerji (2013) calls the dominant perspective and the critical perspective. The first perspective
considers the transformational and diffusional role ICT can play, while the second perspective
considers more the multidimensional impacts of ICT in developing societies (Sreekumar, 2011;
Mukerji, 2013).
It is important to understand the link between ICT and development in terms of socioeconomic
outcomes but also in terms of agencies implied, their policies initiated and initiatives implemented.
While the dominant perspective only sees the provision of technology as solution to rural issues, the
critical perspective enlightens the importance of the agenda and policies while bridging digital
divide and driving development with the support of ICT (Mukerji, 2013).
4.2.1 ICT4D
This perspective has been mainly envisioned by international and development organizations as
being ICT implementation with development goals in emerging countries. It has been driven by the
“[…] liberalization of telecommunication, privatization of public service delivery, and
informationalization”. (Mukerji, 2013, p. 16) They have seen the resulting digital divide from the
uneven diffusion and access to ICT between developed and undeveloped countries as an
international goal to achieve. It is certainly the first Global Knowledge Conference, whose a
worldwide network emerged (called the Global Knowledge Partnership) in 1997 in Toronto,
(OECD, 2003, P. 7, cited by Mukerji, p. 16) that launched the perspective ICT could achieve
sustainable and equitable development. Development reports from the World Bank and the United
Nations Development Programme also played an important role in putting forward ICT for
development.
ICTs are considered as means for development in emerging and poor countries because they can
participate as an alternative in the social, political and economic knowledge society. Secretary-
General Kofi Annan stated in his Millennium Report (United Nations, 2001, cited by Kendall and](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-51-2048.jpg)
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Singh, 2006, p. 1): “New technology offers an unprecedented chance for developing countries to
`leapfrog´ earlier stages of development. Everything must be done to maximize their peoples' access
to new information networks”. The Millennium Declaration (United Nations, 2000), adopted by 189
members of the UN in 2000, set up 8 Millennium Development Goals (see Appendix for more
details) “[…] for improving the existence of many and for saving the lives of those threatened by
disease and hunger” by 2015:
1. To eradicate extreme poverty and hunger
2. To achieve universal primary education
3. To promote gender equality and empower women
4. To reduce child mortality
5. To improve maternal health
6. To combat HIV/AIDS, malaria, and other diseases
7. To ensure environmental sustainability
8. To develop a global partnership for development
In the Millennium report (United Nations, 2000), it is clearly stated ICT can be envisioned as means
for developing communication and information exchange over the globe overcoming different
issues related to socioeconomic differences:
The information technology sector, in short, can transform many if not most other sectors of
economic and social activity [...] This is not to say that the transition will be easy for
developing countries, especially the very poor. Lack of resources and skills is part of the
problem, inadequate basic infrastructure another, illiteracy and language a third, and, of
course, there are concerns about privacy and content. Technical solutions will become
available for many of these problems, including wireless access, and even simple automatic
translation programmes, enabling us to communicate and engage in e-commerce across
language barriers. (United Nations, 2000, p. 34)
Therefore, ICT was considered in the beginning of the 2000’s as kind of perfect solution to struggle
socioeconomic problems related to the lack of infrastructures, institutions, content and skills in low
socioeconomic and remote areas of the world. It was also mentioned how the individual mode of
information and communication consumption could be overcome in emerging countries through
shared-access facilities:](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-52-2048.jpg)
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[...] Public telecentres have been established in places from Peru to Kazakhstan. In Egypt,
for example, the United Nations Development Programme has helped to create Technology
Access Community Centers to bring the Internet and fax service to poor and rural areas.
With help from civil society organizations and the private sector, we can expand these pilot
programmes to reach even the remotest corners of the globe. (UN, 2000, pp. 33-34)
4.2.2 ICT-D
This perspective has appeared as an interdisciplinary approach to reconsider the hype of success
ICT4D proponents envisioned for empowering rural communities. The idea behind this critical
discourse was to get a multidimensional understanding of the “[…] impacts of ICT diffusion,
resistance and acceptance in developing societies challenging varying presumptions of ICT4D.”
(Sreekumar and Rivera Sanchez, 2008, cited by Sreekumar, 2011, p. 6) Hence, ICT-D considers the
way the different types of agencies set up ICT4D, from the elaboration and application of policies
to the implementation and evaluation of initiative. It approaches ICT with the objective to facilitate
technology appropriation by the communities (Mukerji, 2013).
Due to lack of access to ICT in low socio-economic areas, the ICT4D discourse creates kind of
“information poverty” since they consider as much important providing information and
communication to marginalized communities as providing them with the basic necessities and
livelihoods (Wade, 2002; Wilson, 2003; cited by Mukerji, 2013, p. 24). Hence, the digital divide
has been translated into issues of development which could be resolved by ICT4D, so that the
supply side of technology (technology and service providers) was considered instead of the demand
side (beneficiaries). Therefore, it is more the question of provision of technology which is
considered and not the question of development needs and requirements (Mukerji, 2013).
The problem with ICT4D is that most of the time they are too much programmatic, technocratic and
instrumental in nature and forget to address the problem in nature (Sreekumar, 2011; Mukerji,
2013). The ICT4D initiatives that have been launched during the beginning of the 2000’s were too
much optimistic, thinking all issues of development and problems of poverty were going to get
solved because of the potential of ICTs (Wade, 2002, cited by Mukerji, 2013, p. 25). When they](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-53-2048.jpg)
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failed, the protagonists generally did not try to understand the reasons of the failure and invoked
they were exclusively related to “demand-side constraints like culture, political will, community
participation etc.” (Mukerji, 2013, p. 25)
Therefore, in order to understand the real impact any ICT initiative can have on development, it is
critical to not only focus on the results and impacts, but rather on the mechanisms involved: “[…]
assemblage of agencies, their agenda, policies and programmes.” (Ibid) In the critical perspective,
ICT is therefore not perceived as “end” but as “enabler”, which cannot by itself empower the
marginalized communities if they don’t have “[…] the capabilities and resources available to
harness this potential.” (Ibid)
5. The private and for-profit ICT-enabled kiosks
5.1 Definition of ICT-enabled kiosks
ICT-enabled kiosks (also called multipurpose telecenters or MPTC) are “[…] facilities that provide
shared and mediated access to technologies for socio-economic development” (Mukerji, 2013, p.
28). The access-shared facilities in emerging and poor countries, particularly in remote and rural
areas, provide a full range of support services to a specific and disadvantaged group of people
(called the “Bottom of the Pyramid”) for developing their local community with socio-economic
purposes (Fillip and Foote, 2007; Ariyabandu, 2009; Liyanage, 2009; Mukerji, 2009; Unwin, 2009).
They are based on a set of information and communication technologies as follows: hardwares
(computers, printing and scanning equipment, telemedicine equipment), softwares, internet
connection, etc. Over time, several models emerged with different names but based on the same
design as ICT-enabled kiosks: cyber café, multipurpose centers, pc kiosks, mobile Internet units,
community multimedia centers, technology centers, village knowledge centers, telehuts, etc.
(Ariyabandu, 2009; Fillip and Foote, 2007; Liyanage, 2009; UN, 2009). People can use them as
community, learning, technology and business centers at the same time (Fillip and Foote, 2007, p.
1) so that they become a “knowledge hub”: “[…] vibrant centre which is accessible to communities](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-54-2048.jpg)
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to gain, share and organize knowledge depending on their needs and environment […] [and] acts as
an intermediary station between the community and knowledge network” (Ariyabandu, 2009, p. 4)
These shared-access facilities provide fee-based or free-of-charge services, depending on the social
and/or business goals resulting from the business model of the operator. There can be several
criteria to distinguish them (as cited by Mukerji, 2013, p. 39):
a) number and type of technologies deployed (Jensen, 2001; Oestmann and Dymond, 2001)
b) nature of the agency orchestrating the network – non-government, government and private
(Sarkar, 2003; Sood, 2003)
c) ownership of individual kiosk – private enterprise or public organization, community or
NGO (Proenza, 2001; Gurumurthy, Singh and Kasinathan, 2005)
d) basic purpose – developmental or commercial (Proenza, 2001)
e) functional orientation – profit or non-profit partnership
f) location – developing or developed countries (Oestman and Dymond, 2001, p. 3) and urban
or rural areas (Harris, 2001)
g) usability – thematic service relating to one specific area or multiple service offerings
(Harris, 2001; Sood, 2003)
As rural areas severely lack of critical facilities to answer their community needs, ICT-enabled
kiosks can serve as platforms for information access, training and knowledge sharing and
empowerment. Therefore, their primary goal is to improve the wellbeing of the community by
increasing the information access though different areas, which primarily concern rural areas, and
drive rural development: agriculture, education, healthcare and other crucial aspects. However, their
function is not only to transmit knowledge, but also to serve as a place of interaction between the
community members to share the knowledge acquired (Unwin, 2009).
5.2 ICT-enabled kiosks: emergence and evolution of the movement
The ICT revolution started in 1985 (Sreekumar, 2011, p. 2), in Europe and North America with the
“telecottage” or “community technology center” movement in order to overcome the remoteness
and isolation of rural areas where people have low purchasing power and undeveloped](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-55-2048.jpg)
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telecommunication infrastructures (Fillip and Foote, 2007, p. 8; Mukerji, 2008, pp. 2-3;
Ariyabandu, 2009, p. 1; Liyanage, 2009, pp. 12-13). At that time, telecenters were considered as
shared public facilities where people could access and use information and communication
technologies (Colle and Roman, 1991, p. 1; Proenza, 2002, cited by Mukerji, 2008, p. 2).
During the 1990’s, the “period of telecentre evolution” (also called “telecentre 1.0”), ICT
initiatives started to offer ICT shared-access and connectivity to the public at large scale, especially
to middle and low-income housekeepers, developing countries and rural areas with no availability
of ICT infrastructures (Fillip and Foote, 2007; p. 8). They were generally implemented as pilot
initiatives by civil society organizations or NGOs with the support of donor agencies and
governments. The idea behind implementing these shared-access facilities in emerging countries,
more precisely in remote and rural areas, was to target marginalized communities (the “Bottom of
the Pyramid”) for bridging digital divide and empowering their local community (Ariyabandu,
2009, p. 1; Liyanage, 2009, pp. 12-13). Telecenters were henceforth considered as shared public
facilities where low socioeconomic communities could obtain information and communication
services they could not get individually for socio-economic interests (Colle and Roman, 2001, p.3,
cited by Mukerji, 2008, p. 2).
In the end of 1990s and in the 2000’s, the “telecentre movement” (also called “telecentre 2.0” or
“telecentre ecosystem”) made scale (Mukerji, 2008, p. 3, Liyanage, 2009, p. 13). The lesson learnt
was that “[…] the provision of technology per se will not bring about any change unless and until
they fulfil a definite need of the people and are complemented by supporting physical and social
infrastructure” (Mukerji, 2008, p. 2). The usability of the shared-access facilities also improved
from essentially basic services (printing, browsing, emailing, etc.) to more specific areas of concern
for the people (e-agriculture, e-education, e-health, e-governance, etc.). As mentioned Maitrayee
Mukerji (2008, p. 2), another specific layer which counted in that “telecenters movement” was
certainly the role mediated as intermediary by the kiosk operator between the technology and the
people “[…] to overcome barriers of low levels of literacy and skills”.
Moreover, the promise in the early 2000’s that ICT could achieve Millennium Development Goals
(ICT4D) and benefit everybody everywhere (bridging digital divide) convinced major technology
companies in the ICT industry such as Microsoft Corporation, Intel and AMD to consider the](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-56-2048.jpg)
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marginalized and disadvantaged (the “Bottom of the Pyramid”) by “[…] conducting market
research on this segment, building diverse philanthropic programs, and creating alliances with civil
society organizations and national governments around the world” (Liyanage, 2009, p. 14). This
promise could be depicted by the emergence of the private and “[…] profit-seeking ICT for
development (ICT4D) industry, which tended to collaborate with public or nonprofit partners, but
engaged the private sector as the driving force” (Liyanage, 2009, p. 13).
There result of the “telecentre movement” period, the conviction while “universal service” was not
possible to provide to everybody on the planet, “universal access” was through shared-access the
best way at reaching the most of underserved people possible (Mukerji, 2008, p. 3; Fillip and Foote,
2007; p. 8). Maitrayee Mukerji also pointed out that “[…] the emergence of certain supply side and
demand side factors at global and national levels” resulting from the “telecentre movement”
(Mukerji, 2008, p. 8):
Supply side factors are primarily the “push” factors of a) rapid technological innovations
related to satellite and wireless technologies, convergence of digital media, Internet and the
World Wide Web (Oestmann and Dymond, 2001, p.2, cited by Mukerji, 2008, p. 8) and b)
the need of the emerging computer and Internet industry to expand their market (Dagrón,
2002; Ya’u, 2002, cited by Mukerki, 2008, p. 3).
The demand or the “market pull” factors is driven by the hope that information technology
will change the nature of interaction in the public sphere with the possibilities of online
democracy, participation, digital empowerment and equity just as it has brought about
revolutionary changes manufacturing and business processes (Mukerji,2008, p. 3)
This period has been characterized by growth and diversification of the types of telecentre models
which have been implemented by development organizations, NGOs and private organizations
(Fillip and Foote, 2007). According to telecentre.orgxii
, by 2007, there were approximately 60,000
government-, community-, and entrepreneur-run telecenters worldwide, respectively over 15,00020
in India at that time (Fillip and Foote, 2007, p. 9). This particular matter opened up questions
regarding their sustainability which are covered in the discussion section of this work with a focus
on the private and for-profit model of ICT-enabled kiosks.
20
telecentre.org, 2006a. This count does not include cybercafés, which are defined as privately owned, primarily urban
establishments providing limited services, such as emailing and browsing (cited by Fillip and Foote, 2007, p. 19)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-57-2048.jpg)
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5.3 ICT-enabled kiosks: the movement in India
In India, the provision and deployment of telecentres has followed different development phases
from the 1990’s until the 2000’s. Since their creation, telecentres have essentially been
implemented to target rural areas as the poorest socio-economic groups of India, counting for one
seventh of the world’s population, live there and suffer from digital divide essentially due to “[…]
differential adoption of the Internet facility […]” (Ariyabandu, 2009, p. 2)
In 1992, M. S. Swaminathan Research Foundation (MSSRF) organized an interesting dialogue on
the benefits of ICT in sharing and spreading knowledge for rural development, more especially for
sustainable agriculture (Vasanth and Senthilkumaran, n.d., cited by Mukerji, 2008, p. 4).
Nevertheless, as reported by Albrechtsen (Albrechtsen, 1987, cited by Sreekumar, 2011, p. 4): “[…]
the first telecentres in India did not appear until the late 1990s.” At the beginning, their deployment
was initiated by public policies and conducted by development agencies such as NGO’s, Civil
Society Organizations (CSOs) and public sector, with different motivations according their goals
pursued (Sreekumar, 2011, p. 4).
The phenomenon of village cyberkiosks appeared at that time “[…] to be identified as a major form
of development experiment involving the deployment of ICTs for social and economic
transformation in rural India” (Sreekumar, 2011, p. 5). In 1998, MSSRF developed the two first
Information Villages in Pondicherry (Tamil Nadu) in partnership with the International
Development Research Centre (Mukerji, 2008, p. 4), in order to provide telecommunications
infrastructures for enabling the dissemination and sharing of appropriate content related to
agriculture, education, health, weather, job opportunities, government, etc. (Subramanian and
Arivanandan, 2009, p. 108). Another similar project called the Warana Wired Village Project
(Maharashtra) was implemented at the same period in 70 villages “[...] on the recommendation of
the Prime Minister’s task force on IT to demonstrate the use of new technologies for integrated rural
development”. Several pilots including Gyandoot (Madhya Pradesh), SARIxiii
(Tamil Nadu) and
Tarahaat (Bundelkhand and Punjab) were also implemented in the very beginning of the 2000’s
(Mukerji, 2008, p. 4; Mukerji, 2013, p. 36). Since these projects were pilots, sustainability was not
taken into account: “[…] affordability, adaptation and adaptation of technologies in rural settings](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-58-2048.jpg)
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were the key concerns” (Mukerji, 2013, p. 37). As mentioned by Mukerji (2013, p.37), only
government’s projects in partnership with the private sector (PPP) through franchisees survived like
Akshaya (Kerala) for instance. This latter exclusively provided e-governance services (with initial
e-literacy programme) at that time; now it is also operating B2C and C2B services depending on the
services supply choices of the kiosk entrepreneurs (Masiero, 2011). However, in the case of
Akshaya, 200 out of 630 original centers had already closed by the end of 2006 (Kuriyan, Ray and
Toyama, 2008, p. 99).
During the 2000’s, the private sector finally entered the game. Particularly, during the “telecentre
movement”, country-level and private organizations like Drishtee, n-Logue and ITC e-Choupal
implemented and developed ICT-enabled kiosks as network orchestrators for “[…] earning profits
by targeting “Bottom of the Pyramid” communities” (Liyanage, 2009, p. 14). Both Drishtee and n-
Logue previously had experienced implementation of ICT-enabled kiosks: “Drishtee was involved
with Gyandoot, while n-Logue was the technology provider for SARI project” (Mukerji, 2013, p.
37). Concerning ITC e-Choupal, the goal was to become globally competitive by building up a
supply chain network for commodities from the farmers in rural India (Srinivasan, 2007; Kumar,
2005, cited by Mukerji, 2013, p. 37). Within this period, the kiosk design and implementation has
been highly considered: “[issues like entrepreneurship, sustainability of kiosks, user fees, basket of
services, process and product innovations became [the] key concerns […]” (Mukerji, 2013, p. 37).
In that sense, hardware and software providers worked for “[…] prototyping products [for markets]
characterized by infrastructural constraints and low levels of literacy (Schwittay, 2008, cited by
Mukerji, 2013, p. 37).
In the second half of the 2000’s, more precisely in 2007, a new phase called “Mission 2007”, a
multi-stakeholder initiative (Mukerji, 2013), has been implemented under the National e-
Governance Plan (NeGP). It was formulated by the Department of Electronics and Information
Technology (DeitY) for delivering services in a socially inclusive manner to the disadvantaged
communities of rural India (Parminder (editor), 2009, p. 1). The Government of India envisioned to
allocate “[...] around Rs. 5,742 crore for setting up one-lakh (1,00,000) Common Service Centers
(CSCs) under its National e-Governance Plan” (Mukerji, 2008, p. 4). Previous state-led telecentre
initiatives of e-governance services merged with that led-government CSC scheme (Singh (editor),
2009, p. 4; Mukerji, 2013, p. 38). The services provided by the CSCs are the following ones:](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-59-2048.jpg)
![52
Government to Citizen Services (G2C), Business to Citizen Services (B2C), financial inclusion
services, educational services, digital literacy programmes, skills development programmes and
agricultural services (Shadrach and Sharma, 2013, pp. 12-13). In January 2009, there were already
22,000 CSCs implemented and “the states of Haryana, Jharkhand and Sikkim had completed their
CSC roll out” (Gulati, 2009, p. 5). In 2013, there were still more throughout the whole country:
over 95,000 CSCs had been rolled out (Kumar, Kumar and Kumar, 2013, p. 34). As on 31st
of
March, 133,847 CSCs had been rolled out. 21
However, the impacts remain not satisfying: limited
utilization of the CSCs due to lack of e-governance services availability (Gulati, 2009, p. 5; Singh
(editor), 2009, p. 4; Shadrach and Sharma, 2013, p. 21).
Maitrayee Mukerji pointed out a very important factor regarding the telecentres both in her book
(2013) and during my interview with her (December 2014): It is very hard to estimate how many
telecenters are still operating in rural India nowadays and whether they have high user frequency or
not. A report from ITU in 2013 stated that “India has more functional telecentres than the rest of the
world combined” (Shadrach and Sharma, 2013, p. 2): 99,000 plus CSCs and tens and thousands of
privately-run shared-access facilities.
5.4 Separations at the “Bottom of the Pyramid”
The “Bottom of Pyramid” consumers’ situation/market is described in the book The Fortune at the
Bottom of the Pyramid (Prahalad and Hart, 2002, p. 2) exactly as follows:
1. Most Tier 4 people live in rural villages, or urban slums and shantytowns, and they usually
do not held legal title or deed to their assets (e.g., dwelling. farms, businesses).
2. They have little or no formal education and are hard to reach via conventional distribution,
credit, and communications.
3. The quality and quantity of products and services available in Tier 4 is generally low.
The above-mentioned facts can explain why it is tough for BOP producers to enter the bottom
market and target customers: it is subsequently “[…] difficult to identify, connect with, and market
their products to, potential customers (Karsani, 2007, cited by Tarafdar and Singh, 2011, p. 1).”
21
http://csc.gov.in/](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-60-2048.jpg)
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More precisely, BOP consumers can be defined as the largest but poorest or lower-income socio-
economic group over the globe, living mostly in Africa, Asia and South America (Hammond and al,
2007, cited by Tarafdar and Singh, 2011). They “[…] are characterized by poor infrastructure,
information asymmetries and weak institutions (Viswanathan et al, 2009), hence are poorly
developed.” (Tarafdar and Singh, 2011, p. 6)
BOP includes around 4 billion people who cannot afford more than US $1,500 a year. More
alarmingly, over a billion people (one sixth of the world population) sustain on less than US $1 a
day. Moreover, it is interesting to underline the tremendous income divide between the rich and
poor: the richest 20% obtained about 70% of total income in 1960, while the same richest
percentage of people accounted for 85% of total income in 2000. Even though the “Bottom of the
Pyramid” is often considered as a non-viable market because of low affordability (Karnani, 2007,
cited by Tarafdar and Singh, 2011), it constitutes the majority of the world population and a
multitrillion-dollar informal and local market as well. The World Bank even predicts the BOP
population will count over 6 billion people by 2040. (Prahalad and Hart, 2002, p. 2)
According to Prahalad and Hart, the “Bottom of the Pyramid” market depends on four intertwined
factors which impact the development of its commercial infrastructure. Nevertheless, it is “[…] a
resource- and management-intensive task”, for the reason that “few local entrepreneurs have the
managerial or technological resources to create this infrastructure” (Prahalad and Hart, 2002, p. 11).
Figure 28 - The commercial infrastructure at the BOP (Ruohonen and al (eds.), 2012)
Moreover, it remains complicated to enter and develop the BOP market for the following reasons
(cited by Tarafdar and Singh, 2011, p.2)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-61-2048.jpg)
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1. Remote location of BOP communities making physical distribution of goods costly (Vachani
and Smith, 2008);
2. BOP individuals having low and uncertain incomes (Prahalad and Hammond, 2002);
3. and the presence of “informal” low markets having exploitatitve intermediaries with
asymmetrical information access (Prahalad and Hammond, 2002).
According to Bartel’s theory of market separations (Bartels, 1968, cited by Tarafdar and Singh,
2011, pp. 4-9), there are four separations which are binding in the case of the “Bottom of the
Pyramid” 4, as in the case of rural India, they hinder all kind of services or product exchanges:
1. Spatial separation relates to the geographical distance (given remote, dispersed and
difficult-to-access places because of poor transportation facilities available);
2. Temporal separation relates to the time difference (given poor information access);
3. Informational separation relates to informational asymmetry (given low literacy rate and
lack of access to information sources);
4. Financial separation relates to difference between willingness and affordability of
consumers to purchase what they want (given low skills levels).
Research showed “[…] how ICT can shape and facilitate information processing and transactions
among entities (i.e. individuals, departments and organizations) […]” and can then play an
important role by bridging the four market separations between marketers and customers (e.g.
Zuboff, 1988; Armstrong and Sambamurthy, 1999; Weill, 1992, all cited by Tarafdar and Singh,
2011, p. 4):
1. Automate role relates to the computerization of the information for improving its access,
speed and accuracy and for reducing its cost.
Figure 29 - The World Economic Pyramid (Prahalad and Hart, 2002)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-62-2048.jpg)
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2. Informate role relates to the information itself which enhance decision making.
3. Transform role relates to the transformation which occurs in the way the processes and
relationships happen with new forms of information exchange coming from ICT (by
reducing the transaction costs as pointed out by Nirvikar Singh, 2004).
Based on three research propositions, Tarafdar and Singh (2011, pp. 4-5) “[…] suggest that
particular [socio-economic] conditions at the BOP aggravate the four market separations [-
Proposition 1-], that the roles of ICT can mitigate the separations [-Proposition 2-], and that
reduction of these separations can lead to market development at the BOP marked by increased
consumption and exchange [-Proposition 3-].”
Proposition 1 is verified by “[…] inadequate access to education, skills, finances and information
(Hammond et al., 2007; Viswanathan and Rosa, 2007, cited by Tarafdar and Singh, 2011, p.5),
which make BOP constituents economically vulnerable (Narayan et al. 2000; Karnani, 2007, cited
by Tarafdar and Singh, 2011, p. 5).
Proposition 2 is verified by substituting information flow for physical flow of materials (spatial
separation and temporal separation), by speeding-up information flows and processes (temporal
separation), by making available information (information separation), (Tarafdar and Singh, 2011,
p. 6).
Proposition 3 is verified by “[…] greater spatial, temporal and informational proximity […] and
thus leads to increased exchange in BOP markets.” (Tarafdar and Singh, 2011, p. 6)
Figure 30 - Research Propositions (Tarafdar and Singh, 2011, p. 5)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-63-2048.jpg)
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Therefore, the conclusion is that ICT can alleviate the spatial, temporal, informational and financial
separations resulting from the conditions at the “Bottom of the Pyramid” by helping to drive
development in that market. Chrisanthi Avgerou (2008) explained that literature on information
systems for developing countries more generally considers telecenters as belonging to the transfer
and diffusion discourse, even though some authors would classify them into the transformative
discourse because of overcoming social and political conditions such as extreme poverty and
bureaucratic obstacles (Bailur, 2007). C.K. Prahalad, Professor in Corporate Strategy at the
University of Michigan, agreed with the last position in the foreword of the book Making the
Connection: Scaling telecenters for development the challenge of bridging digital divide for the
people at the “Bottom of the Pyramid” so that they can access Internet and participate to the
knowledge society, can be more especially answered by “[...] the creation of ways for the poor to
have shared access to information and communication technologies (ICT)” (cited by Fillip & Foote,
2007, foreword I).
In that sense the perspective of ICT-enabled kiosks offers new opportunities for targeting this low-
income market by providing them services at affordable price. The model of “entrepreneurship-
through-development” for the “Bottom of the Pyramid” “[...] assumes that market-based solutions,
private enterprise, and advanced technologies can increase the well-being of the poor and
concurrently increase the profits of the private sector [so that] bridging the digital divide [through
these principles] is thus seen as a huge opportunity for development” (Kuriyan, Ray and Toyama,
2008, p. 101). In other words, this model argues that “[...] if the poor are treated as consumers, this
will lead to positive development outcomes through the generation of opportunity and of wealth”
(Hart, 2005, cited by Kuriyan, Ray and Toyama, 2008, p. 101). Nevertheless, the difficulty remains
high regarding the context of the market targeted as it is explained later on in the section Discussion
of this work: bringing BOP people out of poverty while being affordable and profitable enough to
continue to develop and sustain business in that market is not an easy task.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-64-2048.jpg)
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5.5 The private model
The private or the commercial model is based on a private organization which operates as a network
orchestrator (Mukerji, 2013, p. 49) of knowledge hubs (Ariyabandu, 2009, p. 4), instead of having a
NGO or the Government as orchestrator of the knowledge network.
Each ICT-enabled kiosk can then be considered as an independent information and development
node (called knowledge hub) within the knowledge network with “[...] a flexible structure to
generate and share information” (Ariyabandu, 2009, p. 2). They “[…] serve the community. […]
[and] contribute to creating knowledge by providing experience gained from the local communities
to the benefit of the global networks at large” (ESCAP 2006, cited by Ariyabandu, 2009, p. 4).
Figure 31 - Telecentre/ICT-enabled kiosks network model (Liyanage, 2009, p. 147)
Nirvikar Singh, Professor of Social Sciences at the University of California, explained that “in the
absence of commercial goals, the organization’s incentive structure is unlikely to be financially
sustainable without continual external infusions of support” (2006, pp. 20-21). The private and for-
profit model is, according to Singh, required whether a business model wants to achieve scalability
and sustainability (Singh, 2006). In that sense, the Millennium Development Goal number eight
targeted participation of the private sector in 2000 to “[…] make available the benefits of new
technologies-especially information and communication technologies” (Fillip and Foote, 2009, p.
11). There are two main models resulting from the private model approach: the corporate model and
the franchise model.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-65-2048.jpg)
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5.5.1 The corporate model
A large company can afford a corporate-led venture model (also called private-led franchise model)
of ICT-enabled kiosks with direct investments (World Bank, 2009, p. 25; Mukerji, 2013, p. 50).
The social goals of implementing these shared-access facilities in rural areas meet the mission and
value of the orchestrating organization (Singh, 2006, p. 22). The scope of operation of such a model
is then related to the scope of economic interest for the corporation; it is why this model is generally
limitedly scaled in rural India, or focuses only on “[…] areas that have significant economic
activity.” (Mukerji, 2013, p. 50)
Singh underlined that it is not necessarily the whole company which is involved in the project, but
just a division can be in charge of implementing the ICT-enabled kiosks. It is for instance the case
with ICT e-Choupal (Singh, 2006, p. 21). Maitrayee Mukerji explained this model has been
primarily initiated for consolidating the supply chain of the corporate agency involved and for
bringing adequate answers in gaining market efficiency of the Indian agriculture (Mukerji, 2013, p.
50). This latter, however, unfortunately results in “[…] fragmented farms, a weak infrastructure,
and the involvement of numerous intermediaries (World Bank, 2003, p. 1, cited by Mukerji, 2013,
p. 50)”.
5.5.2 The franchise model
The franchise model is used as an approach for driving development at large scale of a business
model by combining profit and non-profit motives (Singh, 2006, p. 22). This model was promoted
by many organizations during the 2000’s as it facilitates scalability and replication. The
orchestrating agency plays the role of the umbrella organization and support the whole system. It
can be managed either by a public or a private actor, by an NGO or a public-private partnership.
The franchises are operated by franchisees who are village-level entrepreneurs and whose role is to
apply the standards for technology and services of the orchestrating agency in observance to the
licensing agreements with the franchiser. (World Bank, 2009, p. 25; Mukerji, 2013, p. 49)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-66-2048.jpg)
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1. Agriculture education and information/knowledge sharing (section 5.6.1)
2. Education for literacy and employment opportunities (section 5.6.2)
3. Healthcare information and access to primary care (section 5.6.3)
4. E-governance services (section 5.6.4)
5. Banking and Utility services (section 5.6.5)
Figure 32 – Telecentre as outreach window (adapted from Liyanage, 2009, p. 147)
5.6.1 Agriculture
In India, agriculture remains the primary occupation and source of income for about half of its labor
force (WordldBank, 2014). Therefore, it is very pertinent to consider this economic area in order to
improve the overall human development, especially in rural areas where agriculture generates
employment (around 50% of active Indian workers) and prosperity in rural India (around 18% of
total GDP in 2010, same in 2013), and is therefore central to rural development (WorldBank, 2014).
The productivity has increased but it remains quite low and most of Indian farmers are poor because
of lack of regulation and because of a system of small and inefficient farmers and unfair primary
producers. (Admane, 2014, p. 250) The worst is that system locks any possible growth of the sector,
because it provokes a “[…] cycle of low income, low investments, low productivity and low
income.”22
22
http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-68-2048.jpg)
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Figure 33 - Agriculture and employment
in India (WorldBank, 2014)
Different aspects have to be satisfied in rural agriculture in order to drive development. First, we
must address the tremendous necessity for agriculture to preserve food security in rural areas since
agriculture is the main, and often times, the only source available to feed its population due to
remoteness. Also, the farming income should be considered: the more money farmers are able to
retain, the greater their purchase and investment power will be. Logically, this will have a direct
effect on the the rural economic growth due to increasing domestic demand.
Therefore, farmers constantly need information and knowledge that can help them to get more
efficient and successful operations and results: rainfall forecasting, cropping patterns, modern
cultivation practices, sources of irrigation, market in general and day-to-day market prices
information (Unwin, 2009; Kumar and Sankarakumar, 2012). Moreover, the farmers’ need
requirements can also be related to specific areas they are novice about such as “diversification of
agriculture, promotion of agripreneurship23
, precision farming, hi-tech agriculture, post-harvest
management, value addition and proper marketing […]” (Pasad, 2004, p. 106)
Most of the time, farmers lack information (information asymmetry) and knowledge (knowledge
sharing) to take crucial and beneficial decisions (Unwin, 2009; Glendenning and Ficarelli, 2012).
Farmers have inexistent or asymmetric information on global supply-and-demand conditions that
23
Agripreneurship is an embodiment of distinct functions in the market (Mises, 1996); these distinct functions include
the recombination of resources in ways that create new value and offers new competitive advantage (Schumpeter,
1950). Thus, the necessary conditions for agripreneurship were derived by Amanor-Boadu (2006) to be innovation and
purposeful action. - See more at: http://motresource.com/agripreneurship/](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-69-2048.jpg)
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determine crop prices and they have at the same time inexistent or limited access to crop
management know-how and other valuable information like weather forecasts for instance. ICTs
can then play the role of agricultural extension by directly helping the farming communities to take
the right decisions based on ICT-related agricultural education and research. It constitutes what can
be called the modern farming (Jones, 1997, cited by Meera, Jhamtani and Rao, 2004, p. 1).
The Food and Agriculture Organization of the United Nations (FAO) and the World Bank (2000)
recommended a framework where the farmer takes the central place of the “agricultural knowledge
triangle” including education, research and extension: AKIS/RD (Agricultural Knowledge and
Information Systems for Rural Development). (Rivera, Qamar, Mwandemere, 2005, p. 12) In this
triangle, agricultural information systems for rural development facilitate use of agriculture-related
technology, knowledge and information. The AKIS/RD's system “[...] integrates farmers,
agricultural educators, researchers and extensionists, enabling them to harness knowledge and
information from various sources to improve farming and livelihoods in rural areas” (Rivera,
Qamar, Mwandemere, 2005, p. 13).
Figure 34 - Agricultural extension as part of AKIS/RD (Unwin, 2009, p. 50)
Agricultural extension is part of a knowledge system that also includes research and agricultural
education. They all three involve complementary investments as they are interconnected in a system
(Eicher, 2001, cited by Rivera, Qamar, Mwandemere, 2005, p. 13). It is professionally related to
education as farming agents work in extension and it is also linked to agricultural research as the
knowledge used by agricultural extension stems from agricultural research. In other words,
agricultural extension uses and evaluates the information from the agricultural education system and
feeds back field observations from the research to this system. The agricultural extension’s purpose
is to share information and knowledge to farmers in order to ensure food security and improve their](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-70-2048.jpg)
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agricultural production performance as it facilitates agricultural process development through
credits, supply chain efficiency, marketing, etc. (Rivera, Qamar, Mwandemere, 2005).
Subsequently, job opportunities in agriculture will remain attractive and profitable whether ICTs
succeed to derive process transformations from the information and knowledge gathered by the
farmers, for instance by turning the traditional agriculture into sustainable agriculture. Last summer,
I visited an organic farm in Nagavalli Village, close to Bangalore, where the owner had completely
turned the farming processes towards sustainability. It paid off as he is now earning more money
and some other farmers in the village have followed the same ecological transition.
Therefore, ITC can definitely have a stake in developing agriculture as it offers to consider how to
streamline the information and knowledge in the best possible way to get used by the farmers in
order to optimize their processes. ICTs can play the role of agricultural extension and social
mobilization through integrated information and communication by directly delivering information
and knowledge to the farmers: commodity prices, agricultural practices, market behaviors and
complementary services for “[…] enhanced productivity, income, welfare and sustainable
development” (Unwin, 2009, p. 49). Farm applications and forums (telecentre based or mobile
based), rural radio forums, SMS applications or even agriculture-related TV programming are good
examples of ICT applications for driving agriculture and rural development (Qaisar, Ali khan,
Mohd and Alam, 2011; Glendenning and Ficarelli, 2012; Mittal, 2012). Technological
advancements can be classified under the following categories: past traditional ICT, initial modern
ICT and modern ICT (Glendenning and Ficarelli, 2012; Mittal, 2012).
Figure 35 - Evolution of information sources to
farmers (Mittal, 2012, p. 15)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-71-2048.jpg)
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high-speed transmission of critical medical records and images, X-rays, scans and other relevant
information.” Communication technologies provide at the same time the information to the illiterate
population about diseases, symptoms, curing process and prevention such as “[…] immunization of
children, HIV-AIDS, family planning [etc.].” (Prasad, 2004, p. 107)
Telemedecine can be a perfect example of ICT application which can help to provide or support
clinical care such as consultations and monitoring patient data through different platforms like
mobile phones, videoconference or more generally the Web 2.0 from a remote place (Bagchi, 2006;
Ghia, Patil, Ved and Jha, 2013). It delivers the medical expertise available in urban and efficient
urban hospitals to rural areas. A very well-known and historic example illustrating one of the first
innovative telemedicine initiatives in rural India is when the Indian Space Research Organization
initiated SATCom (Satellite Communication) based Telemedecine programme as an application in
2001 to serve rural and remote areas of India with quality healthcare services thanks to satellite
connectivity (Mishra, Singh and Chand, 2012). This initiative encountered a major success
throughout India, and even though India is currently focusing on “[...] high speed optic fiber based
broad band connectivityxiv
[...] [and] many of the national telehealth schemes are now based on
terrestrial broadband rather than satellite connectivity.” (Mishra, Singh and Chand, 2012, p. 162)
However, telemedicine encounters several challenges, which concern the infrastructure problems
like lack of energy power and maintenance issues (Tiwari, 2010), the difficulty to handling the ICT
systems and understand how it works out (Bagchi, 2006; Tiwari, 2010) and the belief that this
technology might not be financially sustainable considering its high initial investment (Bagchi,
2006). Particularly, the opinion that investments in health technologies are not viable on the long
run often discourages the health care system to leap forward (Murthy, 2008).](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-75-2048.jpg)
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5.6.4 E-government services
E-governmentxv
is the means by which the public sector, namely the national and state government
agencies, serves citizen-centric issues through electronic means afforded by ICT for delivering
services (Rao, 2004; Unwin, 2009). The latter should not exclusively address citizens, but also
business and others in relationship with the government by “[…] utilizing the transformational
nature of technology to create a more open, fair and empowered society which is actively engaged
in the process of being governed” (Sheridan and Riley, 2006, cited by Unwin, 2009, p. 284). As
previously mentioned, the “telecentre movement” has been reinforced by the need of e-governance
in rural and remote areas of India, in order to enable “[…] a responsive, accountable, and
transparent administration that is accessible […]” (Mukerji, 2008, p. 3).
Different kinds of e-government services can be provided, especially C2G and G2C (among others
like G2B, G2G, etc.), which have a significant importance as it concerns directly the bi-directional
relationships between the public sector and the citizens (Unwin, 2009; Kumar and al, 2013). They
can be commonly called “G2C2G” due to the fact that “ICT initiatives may be designed to provide
support to local governance as well as should be able to react to queries generated by local needs of
the communities/citizens” (Malhotra, Chariar, Das and Ilavarasan, 2007, p. 221). Service
applications range from filling out government forms, applying for licenses, requiring birth/death
certificates, clearing customs, raising grievances, paying tax, printing land records, etc. (Toyama
and al, 2004; Unwin, 2009)
E-government services offer proposition values to citizens (Rao, 2004; Malhotra, Chariar, Das and
Ilavarasan, 2007; Upadhyaya and Chugan, 2012), which can be summarized in five categories
according high-level goals of the World Bank (Unwin, 2009, p. 287):
1. Efficiency, by reducing transaction costs and delays to use of government services thanks to
the integration of multiple services from the same source of interaction;
2. Provision, by developing and delivering a provision of government services to the
underserved population of rural and remote areas;
3. Responsiveness, by removing consultations of government – direct internet interactions;
4. Accountability, by increasing transparency and eliminating corruption;
5. Participation, by enhancing the citizen participation in public decisions - more democracy.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-76-2048.jpg)
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7. Case study 1: ITC e-Choupal
7.1 Context of implementation
ITC e-Choupal26
is a venture of the very famous ICT Company, India Tobacco Company, one of
India's largest multi-business corporations, with annual revenues over US$2 billion annually. Since
1990, the International Business Division of ITC, the Agribusiness Division (headquartered in
Hyderabad), more precisely, is active in agricultural sourcing and trading, with revenues over
1$milliom annually. (Admane, 2014, p. 250)
The concept of e-Choupal was introduced in June 2000 by ITC, in order to enable internet access
for farmers in rural India so that they can access to price transparency, share information and make
e-commerce. The idea behind was to facilitate trading and market information for farmers in the
Indian agriculture27
. ITC succeeded to overcome regulatory barriers resulting from the Agricultural
Produce Marketing Committee Act (APMC Act), which “[…] prohibit[ed] the purchase of specified
commodities (including several that ITC deals in) from any source other than government-
designated mandis” (Bhatnagar, Dewan, Torres and Kanungo, 2003, p. 5). The company persuaded
“[…] the political and bureaucratic leadership of various state governments that the “spirit” of the
act (to benefit the farmers) [was] better served through e-choupals [and] as a result, some states
have amended the act (such as Uttar Pradesh), while others have allowed specific exemptions for
such new business models” (Ibid., p. 5)
Therefore, it enabled the procurement and distribution channel through agricultural transactions to
be facilitated “[…] by purchasing from farmers directly by bypassing local markets (called mandis)
that are dominated by middle men” (Admane, 2014, p. 250). ITC subsequently operated a
reengineering of the agriculture and aquaculture supply chain/procurement process for commodities
which nowadays include soybean, coffee, wheat, maize, rice, tobacco, pulses and shrimp (The
DeSai Group, 2011, p. 3). Historically, the focus of ITC e-Choupal was exclusively on agriculture
commodities, but its business model horizontally as well as vertically evolved over time.
26
Choupal (Hindi) means gathering place (Source: Admane, 2014, p. 250)
27
http://www.echoupal.com](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-83-2048.jpg)
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The move toward e-Choupal 2.0
ITC concluded that its core business with e-Choupal 1.0 did not capture enough value through its
streamlined network of farming communities: fair and effective transactions through the
procurement system answered part of the farmers' needs and requirements, but there were still no
supplies of products and complementary services within the reach of ITC and farmers had to find
solutions outside ITC's business for buying agricultural inputs like seeds, fertilizers and
agrichemicals, and services like insurance and credit. (Prahalad and Krishnan, 2011) Therefore, ITC
e-Choupal complemented its network with one-stop shopping infrastructures called Choupal
Saagars (integrated rural service hubs), which are situated at proximity of a cluster of 40 e-
Choupals and constitute “[…] a marketing platform and storefront for agricultural equipment,
personal consumer goods, insurance, health services (including telemedicine), an agri-extension
clinic, a fuel station, and a food court” (Prahalad and Krishnan, 2011, p. 5) They are managed with
help of an ERP (Enterprise Resource Planning) system to follow the demand and determine the
buying price on a daily basis (Ibid., pp. 13-14). Either the farmer could order products (agricultural
inputs and fast moving consumer goods) and services through the saagar or the sanchalak. This
latter person, doubling as operator and salesman, was also charged by ITC to stock them till “[…] a
new individual, with the title of Samyojak, oversaw a region of Sanchalaks, managing the inventory
of goods and serving as the link between Sanchalaks and ITC headquarters.” (Prahalad and
Krishnan, 2011, p. 6) It results from this new business activity that ITC e-Choupal reinforced the
sustainability of its business model given that the farmer henceforth became both the seller and the
buyer, so that now ITC e-Choupal had two-way relationships with farmers in rural and previously
inaccessible and non-targeted markets. ITC had built a holistic market infrastructure serving the
“Bottom of the Pyramid”. (Prahalad and Krishnan, 2011, p. 6)
Figure 42 - e-Choupal 2.0 value chain (Seas of Change, 2012, p. 2)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-88-2048.jpg)
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The move toward e-Choupal 3.0
ITC e-Choupal realized during the phase e-Choupal 2.0 that farmers had become entrepreneurs
through the supply chain system e-Choupal had implemented. Therefore, ITC e-Choupal decided to
add a business pillar to facilitate business opportunities for members of the rural communities.
Figure 43 – e-Choupal 3.0 Business Model (Prahalad and Krishnan, 2011, p. 9)
1st
business pillar: Fast Moving Consumer Goods. The FMCG business was started in 2003
under e-Choupal 2.0 to be distributed with the desire to increase the quality of life in rural India by
providing quality products and to become the leading FMCG Company in India. During the e-
Choupal phase 3, ITC decided to redesign the distribution of the food businesses by streamlining
the exchange and transforming it into “[...] an engagement model, where ITC would buy the
products from the partner companies and have a central distribution center to distribute the products
to the Samyojaks, who would then supply them directly to the retailer.” (Prahalad and Krishnan,
2011, pp. 11) The idea behind was to capture value (data and information) from the digital enabled
exchange (through mobile phone technology) between samyojaks and retailers by feedbacking ITC
and its partners for co-creating more suitable products. Therefore, Sanchalaks were not involved
anymore in the direct purchasing (because of no distribution capabilities), but were in charge of
activities they were good at because of their knowledge, experience and social network such as “[...]](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-89-2048.jpg)
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credit assessment, introduction of retailers to Samyojaks, and communication of promotional
schemes to customers.” (Prahalad and Krishnan, 2011, p. 11)
2d
business pillar: Agri-Inputs &Demo. The business division of Agri-inputs and Demonstration
Farms had been reinforced during the e-Choupal phase 2.0 in order to ensure farmers a minimum
wage and make them continue to farm rather than emigrate in urban areas for employment reasons.
However, demonstration farms were considered a little too much prescriptive and directive from
ITC to the farmers (with a limited audience of farmers). Therefore, ITC decided to develop
personalized demonstrations enabling more intense and closer connections between ITC and
farmers, in order to create the emergence of a knowledge society between the farmers and not only
between ITC and the farmers. The new model of demonstration farms are henceforth showcasing
improved production and harvesting techniques from leading farmers who are selected by the
Sanchalak network “[...] to disseminate the best practices and publicize the activities of the
demonstration farms.” (Prahalad and Krishnan, 2011, pp. 11-12)
3d
business pillar: Employment exchange. It is a one-stop portal (partnership with Monster.com)
for job offerings and applications, training opportunities, and career advice. It is shaped like a
networking platform and tries to answer needs and requirements of the rural youth looking for
employment outside the agriculture and rural India. The employment portal can be accessed from
any computer but the access point remains the e-Choupal centers through the Sanchalaks, who are
paid a commission in case the applicant receives an offer letter. ITC and its portal partners get
revenues as well from transactions and ad s on the platform. (Prahalad and Krishnan, 2011, p. 13)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-90-2048.jpg)
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ECONOMY OF TIME (TEMPORAL AND SPATIAL MARKET SEPARATION BRIDGED)
With the ITC procurement system, if the farmer is located in a remote area, he prefers the e-
Choupal system to the mandi system, as he do not need “[…] to wait for hours, or even days, before
the produce [is] sold.” (Admane, 2014, p. 251) Therefore the mandi system is broken up. The
Research Study 1 shows results regarding comparison of transaction time between the two systems.
It is obvious the e-Choupal system is a better solution for the farmers (Admane, 2014, p. 255).
Figure 45 - Research Study 1: Comparison of transaction time (Admane, 2014, p.
255)
A regional e-Choupal head explained the situation as follows: “With manual scales and record
keeping for grains [in the mandi system], there was delay in weighing and transportation of the
grains. With handheld devices for recording inventory and an ERP application for tracking it [in the
e-Choupal system], our collection processes are faster and we can get the grain to the mills sooner.”
(Tarafdar and Singh, 2011, p. 10)
ADEQUATE, TRANSPARENT AND ACCOUNTABLE INFORMATION (INFORMATIONAL
MARKET SEPARATION BRIDGED)
Farmers had limited or inexistent information and communication access (information asymmetry)
and their farming techniques were not so efficient. The local market mandis imposed price and
conditions in their advantage and were generally corrupted and ineffective (Prahalad and Krishnan,
2011).
On the contrary, ITC e-Choupal facilitates and shares flows of reliable and transparent information
and knowledge among the farmers (weather, prices, news, agriculture extension and risk](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-93-2048.jpg)
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management). Therefore, the e-Choupal system improves consequently the productivity, quality and
competitiveness of Indian agriculture with support of real-time and, customized and effective
information as it enables better decision making concerning cropping patterns and agronomy
practices30
. Farmers can get access to e-portals in their local language that show them “[…] local &
global market prices, crop management know-how customized to the local agro-climatic conditions,
timely and relevant weather forecasts, transparent discovery of prices for their produce, and much
more”31
(Chand, 2006).
Moreover, with the e-Choupal system losses are negligible because an electronic weighing machine
is used, while with the mandi system there were systematic losses (up to 4kg per quintal) because
the trolley was weighed with the produce and the wastage level was higher as well (Admane, 2014).
Furthermore, measurement results are immediately available to farmers while weighing is done
(Bhatnagar, Dewan, Torres and Kanungo, 2003). Therefore, farmers have henceforth confidence in
this local organizational capacity (Bhatnagar, Dewan, Torres and Kanungo, 2003) and retrieve kind
of social dignity (Prahalad and Krishnan, 2011).
GOOD MEASURES, BETTER PRODUCTIVITY AND BETTER QUALITY FOR THE
FARMERS AND FOR ITC
As ITC e-Choupal provides the farming communities with helpful information like weather
forecasts and farming methods, with useful products like high quality farm inputs and with
supporting services like insurance, ITC e-Choupal succeeds to improve the productivity and quality
(efficiency) of the farmers’ output.
The company also indirectly benefits from that situation as that increases the average quality of its
procured products and decreases the underlying risks in its supply chain. (The DeSai Group, 2011,
p. 2) Moreover, farmers are distributed “bonus points”, in the case if “produce [which] are much
higher than quality norm”, to be exchanged in return of ITC products (The DeSai Group, 2011, p.
2). It is a motivation driver which pushes farmers to work for high quality produce.
30
http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html
31
http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-94-2048.jpg)
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BETTER INFORMATION, BETTER PRICE AND DECISION MAKING, BETTER INCOME
(VIRTUOUS CYCLE)
Farmers traditionally sold their products on marketplaces called mandi where they were forced to be
“price-takers” because of their poorness and illiterateness. In the e-Choupal system, farmers directly
sell their production to ITC e-Choupal, bypassing the traditional middlemen and wholesale markets
which took significant transaction costs in the intermediation of the business relationship:
“Commission agents at the mandi used a small weighing scale that was inaccurate and resulted in
less revenue in proportion to the produce [and] the wastage level was higher, because the agents
tended to throw away some grain while evaluating its quality.” (Admane, 2014, p. 251)
With e-Choupal, the farmers have the real time price information available (provision of market
prices through the e-commerce platform), so that they henceforth have control over the price choice
and can in turn decide the right time to sell their crop production for maximizing their own income.
It results from this situation a better decision making and in turn a better income for the farmer.
(Ariyabandu, 2009, p. 16) Therefore, the venture-led ICT e-Choupal enables economic efficiency
though three factors Maitrayee Mukerji identified in his book (2013, p. 50):
1. aggregation of demands into an only computing system (e-commerce platform)
2. reduction in the transaction cost (because of no middlemen like in the mandi system)
3. better bargaining power for the farmers (because of better decision making, and cheaper and
reliable products/services available to farmers)
Figure 46 - Research Study 1: Satisfaction with e-Choupal (Admane, 2014, p. 255)
In the Research Study 1, 35% of farmers were not satisfied, as they sometimes get higher revenues
in the mandi system (1st
reason), and they are not welcome back if their produce is of low quality
(Admane, 2014, pp. 255-256).](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-95-2048.jpg)
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During the e-Choupal phase 3.0, ITC also decided to develop personalized farm demonstrations, in
order to enable more intense and closer connections between ITC and farmers and create the
emergence of a knowledge society between the farmers by cross-learning sharing (Prahalad and
Krishnan, 2011, p. 12)
ADEQUATE CONTENT, PRODUCTS AND SERVICES AND CO-CREATION IN THE
BUSINESS PROCESS
During the e-Choupal phase 1.0, ITC decided to personalize the content on its online platform for
the heterogeneous farmer groups: “There was a separate website for each of the crop and language
combinations (e.g., soyachoupal for soya beans, aquachoupal for marine products, planters.net for
coffee).” (Prahalad and Krishnan, 2011, p. 16) During the e-Choupal phase 2.0, these individual
websites all have been integrated into only one: www.echoupal.com (Ibid, p. 17).
With e-Choupal phase 3.0, ITC decided to engage more in the contextual understanding of its
retailers/sellers/sanchalaks and customers/buyers/farmers, in order to better address their
requirements with value-added products and services. There was a real willingness to create an
open system for innovation, development and co-creation and through the hubs, so that they become
an entrepreneurial ecosystem for identifying opportunities “[…] by intercepting, capturing,
collating, and reporting emerging trends, tastes, and business propositions in the hub ecosystem.”
(Prahalad and Krishnan, 2011, p. 21)
ITC initiated the redesign of the distribution supply chain, in order to capture more value (data and
information). They eliminated the sanchalaks from the supply chain since they did not provide
enough value (low distribution capability and low interest) and streamlined a digital enabled
exchange only between samyojaks and retailers for feedback to ITC and its partners in co-creating
more suitable products (Ibid.). Here, mobile phone technology (sms messages and mms messages)
played the role of vehicle for providing the necessary information to farmers' needs and requests
without necessarily going to the e-Choupal center: “For example, a farmer could use his mobile
phone to send in a digital picture of a diseased crop to obtain advice on what to do to fix it.” (Ibid.,
2011, p. 14)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-97-2048.jpg)
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Moreover, they took the initiative to make the farmers participate in the design and co-creation of
the content, in order to develop more adapted content to needs and requirements. While ITC e-
Choupal received aggregated data on the individual farmers through the sanchalak during the e-
Choupal phase 2.0, ITC also henceforth (with e-Choupal 3.0) used mobile technology to
individually connect with the farmers and capture directly information and feedback from them, in
order to further develop customized solutions and provide advises to farmers with ITC staff
(Prahalad and Krishnan, 2011).
Finally, it is absolutely certain the undergoing shift from the pc platform (at the e-Choupal center)
to the mobile platform was an enabler for improving customization of e-Choupal services and for
facilitating user-friendliness (individual and home appliance) (Prahalad and Krishnan, 2011, p. 17).
However, even though the telecommunication network in rural India has been improved and
developed over time, there are, I would say, still three issues to overcome regarding the technology
the e-Choupal center: 1. the human capacity (limited technology-related capability); 2. the
affordability (limited capacity to pay); 3. the connectivity (limited coverage).
FINANCIAL SUSTAINABILITY OF THE BUSINESS MODEL
ITC claimed its business to be totally profitable and sustainable, arguing that it was able to recover
equipment costs from an e-Choupal center in only one operational year (Dangi and Singh, 2010, p.
181). Since ITC is the network agency and a Corporation with shareholders, its business model
remains sustainable as long as ITC considers e-Choupal to be a profitable business (Seas of Change,
2012, p. 5).
Moreover, ITC decided to diversify its portfolio in phase 3.0 for not only counting on agricultural
commodity sourcing and FMCG distribution, in order to continue to expand and scale its business
in rural India by exploring new business models. This decision is partly due to the high inflation in
2006 in India when “[…] prices were increasing and agricultural production was suffering” (p. 10),
which made realize ITC the importance of the diversification for ensuring sustainability.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-98-2048.jpg)
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OTHER SOCIOECONOMIC COLLATERAL EFFECTS
Villagers can also use the center as place of information and communication thanks to internet
connectivity. Village children can especially use “[…] computers for school work, games and to
obtain and print of their academic test results.” (Admane, 2014, p. 253)
INFRASTRUCTURE
In rural and remote India, issues can occur with the infrastructure such as “[…] frequent electricity
outage and unreliable Internet connectivity” (Bhatnagar, Dewan, Torres and Kanungo, 2003, p. 5).
However, ITC did work on getting upgraded telephone exchanges and VSAT systems were used in
remote areas. Furthermore, some e-choupal centers were even equipped with “[…] backup batteries
recharged with solar panels.” (Bhatnagar, Dewan, Torres and Kanungo, 2003, p. 5) Over time, ITC
e-Choupal succeeded to upgrade its connectivity infrastructure so that the e-Choupal centers used
broadband VSATs for real-time and fast internet connectivity (Prahalad and Krishnan, 2011, p. 17).
Figure 48 - VSAT satellite dish for connectivity (Toyama and al, 2004, p. 7)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-99-2048.jpg)
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7.3.2 Critical issues
SOCIO-CULTURAL AND SOCIO-ECONOMIC INCLUSION AND INTEGRATION
Kumar (2004, cited by Walsham, 2010, p. 13) suggested that access to the e-Choupal system was
influenced at village level by castes, political affiliations and economic size of one’s farm, even
though he admitted that further and more exhaustive research was needed to assess this assertion.
Moreover, the core business of ITC e-Choupal is to procure farmers' produce and sell it for profit.
ITC center should more take into account the village ecosystem and propose other value
propositions, in order to make young people stay in rural areas and not emigrate in masses in urban
areas. In that sense, it is at a certain point the reason why e-Choupal iterated from e-Choupal 2.0 to
e-Choupal 3.0: integration of the platform “employment exchanges” and willingness to make its
farming communities become entrepreneurs and co-creators.
SOCIO-ECONOMIC IMPACT
Moreover, the fact ITC operates a rural consolidation through a kind of “corporatization” or
“monopolization” of the procurement and information channels of the Indian agriculture may lead
to think “[...] the individual income increase of participating members may be at the expense of
non-participating members” (Dangi and Singh, 2010, p. 179). It can therefore be considered like a
monopoly as it “[…] promotes corporate dependency of local agriculture and monoculturisation of
agroproduction systems” (Singh and Khatri (eds.), 2008, p. 4).
The question which comes up behind is how long the monopolistic attitude of ITC will sustain
consumer advantage; considering business goals as above to social goals, because of market logic
of profitability: “Simple economic logic tells us that the apparent consumer benefits accrued when a
monopoly is being established is short lived.” (Singh and Khatri, 2008, p. 3)
Furthermore, the most damaging reality is that this monopolistic approach substitutes alternative
operators like “freelance government mandi based procurement agents”. The mandi system already
markets half less soy than before the introduction of the e-Choupal system (Dangi and Singh, 2010,](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-100-2048.jpg)
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p. 181). Even though these alternative operators were inefficient and even not fair, they were part of
the rural community and the profit generated and wealth created remained in rural India, while with
the ITC e-Choupal system the profit is in the hands of the ITC Corporation.
The positive impact of ITC e-Choupal on the community may be then at certain points mitigated,
especially for other reasons, too:
No real proof the small and poor farmers benefit from the e-Choupal system as the produce
requirements are henceforth higher for the farmers; high quality crops require to invest
money so that “the e-Choupal system is built around the needs and interests of rich farmers
[...]” (Singh and Khatri, 2008, p. 3) An ITC Sagaar store officer in Sehore District (Madhya
Pradesh) had reported statistics according the typology of farmers selling through the e-
Choupal channel: 70% were medium-large farmers (more than 5 acres32
of land) and 30%
were small farmers (less than 5 acres of land) (Seas of Change, 2012, p. 3).
Commercial focus on agriculture production and corporate dependency through
“monoculturisation” increases prices and reduces local food security (Singh and Khatri,
2008, pp. 3-4); There has already been a cropping shift towards soy plantation (from 50-
90% in some regions) (Dangi and Singh, 2010, p. 181);
No “get-involved” possibilities for the local communities to leverage the monopolistic
system of ITC.
Effective governance should then remain the priority for e-Choupal over time, in order to continue
to serve the socio-economic goals and self-sustainability of its shareholders (Seas of Change, 2012).
ENVIRONMENTAL IMPACT
ITC should more consider the environmental impact, as they already somehow reached the
economic impact and the social impact, in order to enable sustainable development in Indian
agriculture: agri waste recycling, organic farming practices, and use of bio fuels from waste land
(Pant and Negi, 2014).
32
1 acre = 4,046.8564224 m
2](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-101-2048.jpg)
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GEOGRAPHIC SCALABILITY AND DIVERSIFICATION
One of the problems with IC e-Choupal is the scope of its business whose its scalability depends. It
is exclusively focused on agriculture related to soyabean and wheat, and therefore ignore other
crops in its procurement system (Mukerji, personnal communication, December 17, 2014) such as
cotton, fruits, vegetables and jawar. There are subsequently several rural areas of India that cannot
be served by e-Choupal. Other business areas could also be integrated within the e-Choupal’s
business scope: fisheries, dairy and poultry. (Admane, 2014)
CAPABILITY OF SANCHALAKS AS SELLERS
During the phase e-Choupal 2.0, the Sanchalaks were not used to sell products and services and
manage the inventory as they did not have any business skills and entrepreneurial experience. Many
of them “[...] were losing interest in their role and felt that they were wasting time and effort in
developing these businesses without much return.” (Prahalad and Krishnan, 2011, p. 6) Therefore,
in the e-Choupal phase 3.0, ITC decided to train them in retailing and distribution management, so
that their activity becomes effective, time-worthy and profitable as well.
TECHNOLOGY
ITC wanted to use ICT for answering appropriate and individual needs of farmers based on
analytics, so that they “[…] partnered with Nokia to think about how to personalize what each
farmer received, and how to develop a user-friendly interface that would secure farmer adoption of
using mobile technology for transactions previously conducted through the e-Choupal computer.”
(Prahalad and Krishnan, 2011, p. 14) A big issue encountered at that point by ITC was the need of
local language.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-102-2048.jpg)
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8.2 Business Model
Vision: Enhance the life quality of every rural Indian by driving the digital revolution.
Mission: Set up a profitable network of wirelessly-connected Internet kiosks in villages
throughout India.
Scope of coverage: 7 States: Tamil Nadu, Karnataka, Andhra Pradesh, Gujarat, Maharashtra
and Madhya Pradesh (Paul, 2004, p. 16)
Status: Non-operational since 2007 (Satyan Mishra, personal communication,
December 28, 2014)
The TeNeT group took its inspiration from the rapid expansion of cable TV in India (from zero to
50 million within a decade) where trained operators went to each house to find subscribers and
earned money from them on a monthly basis by providing repairing services on Sunday. Based on
such a small-scale entrepreneurship system, manpower costs were strongly reduced, which made
the service affordable. Thereby, TeNeT decided to set up a low-cost and distributed business model
of delivery for providing rural connectivity through rural service providers (RSPs), in order “[…] to
spur demand for internet access through its corDECT technology” (Kumar and Jhunjhunwala, 2002,
cited by Mukerji, 2013, p. 37).
N-Logue’s business model followed the idea of working on a network of local entrepreneurs with
the mission to provide services to rural subscribers. It is based on a three-tier franchise business
model that executes the delivery and management of internet services to the end users. The strategy
of decentralization envisioned a rapid expansion of the business model to n-Logue. Each tier level
worked out independently on a financial point of view but interdependently on an operating point of
view (Howard, Simms and Simanis, 2001; Jhunjhunwala and Ramachandran, 2004; Jhunjhunwala,
Ramachandran, and Bandyopadhyay, 2004; Toyama, Kiri, Menon, Pal, Sethi and Srinivasan, 2005;
Ramachander, 2007):
1. At the first level, n-Logue took the responsibility for overall management of the business
model. The company made relationships with upstream suppliers for equipment and content](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-107-2048.jpg)
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every day for one month) was Rs. 100 and horoscope was the most expensive up to Rs. 150
(Kendall and Singh, 2006, p. 10; Sey, 2010, p. 335).
Here below, find the chart of the top services of all the n-Logue kiosks during the first quarter of
2004 (Paul, 2004, p. 24)
Singh mentioned out of the Research Study 2 that “[...] through a process of social norms and
expectations, kiosk operators [provided] a certain amount of free services that include remote health
diagnosis, agricultural techniques and disease information, and basic education.” (Kendall and
Singh, 2006, p. 25) Find below, the kiosk services frequency Kendall and Singh mentioned in the
Research Study 2 for the 4 States studied:
Figure 54 - Kiosk services frequency (Kendall and
Singh, 2006, p. 10)
Figure 53 - the top services of all n-Logue
kiosks, 2004 (Paul, 2004, p. 24)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-111-2048.jpg)
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Kendall and Singh (2006, p. 26), in the Research Study 2, also found out several empirical results
based on multiple regressions, which enlightened a certain number of factors had a significant
impact on the success of a n-Logue kiosk and others that did not (see appendix for regressions and
tables):
Location: significant. Kiosks entrepreneurs who have situated their kiosk close to a main
road of their village are significantly more profitable than others within the village.
Age: significant. Older kiosk entrepreneurs know more people within the village than young
people. Their human capital is higher and results into more customers
Seasonality and learning effects: seems significant. It is certainly related to the phased cost
approach where the fixed costs increased gradually to let enough time to the entrepreneur to
learn its business and perform better: “The higher average revenue of the newer kiosks may
reflect a learning curve on the part of n-Logue in their selection process and training regime.
35
” (Kendall and Singh, 2006, p. 23)
Education: not significant. There is no performance difference between a low educated and a
high educated kiosk entrepreneur.
Gender: not significant. It does not significantly affect kiosk profitability if the kiosk
operator is a woman.
Caste: significant. The caste designation of the kiosk operator impacts on his/her
performance; there is caste discrimination.
Therefore, the Research Study 2 shows us that some variables play a significant role in the
generation of kiosk revenues: a good location attracts more people, the belonging to a more
representative and medium-high socioeconomic caste attracts the people of the same caste and a
35
“[…]average kiosk ages do not differ significantly across the four states, so that geographic variation at that level
cannot be the explanation for the observed pattern as discussed here.” (Kendall and Singh, 2006, p. 23)
Figure 55 - Highest revenue generating services by State (Kendall and Singh, 2006,
p. 27)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-112-2048.jpg)
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the Aravind Eye Hospital, which provides free or low-cost eye care (Jhunjhunwala, Ramachandran,
and Bandyopadhyay, 2004, p. 35; Paul, 2004, p. 21).
Interactions between the villagers and doctors were more generally supported through the
telemedicine ReMeDi system: “[...] the patient’s blood pressure, temperature and heart beat [were]
acquired locally in the kiosk and made available to the physician at the clinic, in Tirupathur.” (Ibid.,
p. 3) Find below on the left the n-Logue telemedicine operational model Dakshinamoorthy and
Gordon (2007) depicted during their research study (Research Study 3) they conducted in the
village of Thirupathur in 2005 and find below on the right the telediagnostic software working with
the ReMeDi system.
Figure 60 – Remote configuration
(Dakshinamoorthy and Gordon,
2007, p. 7)
Figure 61 - n-Logue telemedicine model
(Dakshinamoorthy and Gordon, 2007, p. 6)
Figure 59 - Remote eye-care consultation (Jhunjhunwala
and al, 2004, p. 36)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-118-2048.jpg)
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The opportunity cost was not that high between telemedicine and face-to-face meeting with doctors
in the Research Study 3 since villagers have to afford transportation costs and spend time to go to
the hospital, so that “many villagers postponed taking care of a medical problem because of the
opportunity cost” (Ibid., p. 11). The doctors and the villagers, however, generally preferred and
trusted more the direct human relationship: “physician generally prefer[red] to have a first client
interaction in person at Tirupathur, where his primary care clinic is located.” (Ibid., p. 11)
Regarding the operational affordability of the villagers, costs (uploading and downloading of
information from the kiosk) were indeed not that high. There existed nominal fees for the patients
of the telemedicine programme for instance (~Rs. 10) though, in the Research Study 2, most of the
villagers from the Sivaganga District (Tamil Nadu) were very poor, flexible payments could be
considered to alleviate their low affordability (Dakshinamoorthy and Gordon, 2007, p. 12).
Moreover, the doctor was paid a commission based on the telemedicine usage, which could raise up
his own interest in using the system (Ibid., p. 4).
Furthermore, the villagers’ awareness of the kiosk telemedicine services in the villages increased
because of the variety of services provided: “By visiting the kiosks more often, the villagers are
exposed to the health services available. This improves their awareness about general well-being
and the services they can avail from the remote physician.” (Ibid., p. 11)
E-GOVERNMENT SERVICES
The village kiosk also offered to solve up many issues related to remoteness and the resulting lack
of proximity of the village with the government office. To counter that, internet was used as means
to connect villages with the government. E-government services such as birth, death and land
certificates were operated by n-Logue, but the result was, however, not often successful depending
on the district collector in charge of answering queries such as collecting taxes, duties, other
payments and grievances for the government. (Jhunjhunwala, Ramachandran, and Bandyopadhyay,
2004, p. 36; Paul, 2004, p. 22)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-119-2048.jpg)
![113
attracted by the opportunity to get a job by applying for becoming kiosk operator. There was also
kind of prestige for helping the community. However, several kiosk entrepreneurs did not
accomplish standardized business hours, which resulted in potential loss of revenues. Therefore,
there resulted a high kiosk operators turnover for n-Logue, which could not do anything because of
the nature of its business model based on franchise agreements, except training sessions for
instance. (Paul, 2004, 16-17)
E-SERVICES HARDLY REPLACE EXISTING SERVICES
N-Logue encountered difficulty to generate revenues from video-conferencing/telemedicine
services. As pointed out in the specific Research Study 3 conducted in 2005 in the Sivagangai
district, these services were dependent of three human capacities which were not fulfilled:
1) Human capacity of the villager and sociocultural beliefs: In the Research Study 3, the
villagers who were illiterate tended to ignore the existence of the kiosk in the village as they
remained skeptical of the advantages they could get provided. More precisely for
telemedicine, it could also be related to their inherited beliefs as Dakshinamoorthy and
Gordon pointed out in the Research Study 3:
Many villagers are illiterate. They have some strong held beliefs about ailments and
successful treatments. For example, many of them believe that a shot is necessary for
curing some common ailments. This attracts them towards the quacks who many time
provide a shot filled with distilled water. (Dakshinamoorthy and Gordon, 2007, p. 12)
2) Human capacity of the kiosk operator/entrepreneur: Some kiosk entrepreneurs had another
job outside the business scope of the n-Logue kiosk, so that they were not primarily focused
on the kiosk activities itself. There resulted from that situation villagers could not count on
reliable and regular operation hours of the n-Logue kiosk (Ibid., 2007, p. 13).
3) Human capacity of the service provider: In the Research Study 3, there was a problem of
overstrain of the doctors underlined: “many times the physician [had] to visit several
villages during the week in addition to their remote consultation [and] in addition, many
physicians also [had] a regular day job at a hospital or private practice.” (Ibid., 2007, p. 12)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-121-2048.jpg)
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LACK OF ADEQUATE PARTNERSHIPS/SUPPORT FOR DELIVERY OF SERVICES
N-Logue had developed several partnerships for delivery of services (G2C and B2C) and as
Professor Maitrayee Mukerji (personal communication, December 16, 2014) and Professor
Rajendra Kunar (personal communication, December 21, 2014) admitted, these partnerships did not
really sustain, which caused n-Logue’s difficulty to reach financial sustainability. Steyn gives a
good example in his book ICTs for Global Development and Sustainability about the issue
encountered by n-Logue with partnerships:
For example, partnerships with a private eye hospital at Madurai and with the Tamil Nadu
Agricultural and Veterinary University had virtually ended by the end of 2004 and most of
the kiosks (both Chirag and Dhan36
) had stopped using these partnerships for delivery of
services. […] the main reason for the failure of these partnerships was lack of incentives for
these organizations to continue these partnerships. For example, the additional clientele
that the private eye hospital had hoped to gain did not materialize as there was no regular
follow up by the SARI project officials with these organizations on the services provided by
them. This indicates that the partnerships need to work for the mutual benefit of both sides
for them to be successful in the long-term. (Steyn, 2010, p. 342)
DRIVERS OF FAILURE RATHER THAN DRIVERS OF SUSTAINABILITY
Even though n-Logue was one of the pioneers in achieving ICT4D in rural India through the private
and for-profit model, they have failed to remain sustainable in the sense they are no longer
operational since 2007 (Satyan Mishra, personal communication, December 28, 2014). Therefore, I
have been interested in asking why to my interviewees as I did not think a lot of secondary
resources on the failure of that business model on the internet. Here below, you find the answers I
have been provided by the interviewees who kindly gave me the reasons of n-Logue’s failure. Dr
Maitrayee Mukerji exactly cited me the reasons as follows (personal communication, December 16,
2014):
1. The technology was not viable - Some say that the state (as in government) did not support
in terms of policy, then there were other new telecom service providers, providing the same
36
ICT kiosk SARI project in which n-Logue partnered with an NGO (Dhan Foundation) and others.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-124-2048.jpg)
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count as the main source of revenues for their ICT-enabled kiosk business model and other value-
added services should be integrated to the bunch of provided services to the rural communities
(Bhatnagar, Dewan, Torres and Kanungo, 2003; Parminder and Deepika, 2008).
Therefore, the organization started with providing private services likely to generate more income.
In that sense, Drishtee launched a next venture in Assam in 2003 with the aim at “[…] fulfilling
needs that were common across different contexts” (Mukerji, 2013, p. 117). The new characteristic
that stood out of the business model of Drishtee was its replicability, since the services provided by
Drishtee could be henceforth implemented in different socio-economic contexts and e-governance
services could also be deployed as long as partnerships with the public sector were made possible.
One big challenge Drishtee succeeded very soon to overcome was the barrier of poor internet
connectivity in rural India. Drishtee has been able to become a networked platform’s provider of
private companies for serving the unreached. However, in 2006, Drishtee decided to change its
business strategy from a telecentre-based model to a rural distribution network model, even though
its business model was financially sustainable, because the company was not satisfied by the
number of people reached in rural India. While the company generated enough revenues to sustain,
only few people could reach these services (around 10% according to Satyan Mishra, personal
communication, December 28, 2014).
Nowadays, Drishtee remains sustainable, even though its business model is no longer focused on
ICT; just few businesses use ICT like banking points, citizen civic centers, etc., but they do not
gather anymore plenty of diverse services provided at the same place as it used to be in the
telecentre-based model. The new kind of business scope and social desire of Drishtee is becoming
the biggest rural distribution network in rural India by empowering and supporting its community
eco-system.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-128-2048.jpg)
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9.2 Business Model
Vision: Envision a world where all communities are empowered to achieve shared
prosperity
Mission: Collaborate with marginal communities to develop and nurture rural
enterprises and support the community eco-system.
Type of private model: Franchise model
Scope of Coverage: More than 1,132 telecentre-based kiosks38
in 2006 through 24 districts and
12 states of India (Mukerji, 2013, p. 117).
More than 5,000 villages served in 2012 with the current business model
which has been set up in 2006/2007 and counts on more than 14,000 kiosk
entrepreneurs (Drishtee, 2014; Oxhip, 2014).
Status: Operational; since 2006/2007, the business model changed from telecentre
based to rural distribution network based.
The telecentre-based business model
Originally, the primary focus of the Drishtee business model was providing e-government services
from villages to villages. It evolved as we said in the previous section into “[…] a network
orchestrator with a mission to create and implement a sustainable, scalable platform for
entrepreneurship to enable the development of rural economy and society through the use of ICT”
(Mukerji, 2013, p. 117).
From the very beginning, Drishtee aimed at “connecting India village by village” (Drishtee, 2005).
Originally, it had been launched to provide e-government services to rural villages (e.g., birth
38
transformed into banking points and others since 2007 (Satyan Mishra, personal communication, December 28,
2014)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-129-2048.jpg)
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The most popular services were though digital passport photography (61 percent of use), digital
photostat copies of applications and forms (41 percent of use) and checking examination results on
the internet one or twice times in a year (27 percent of use). As the two most used services were
offline services (passport photo and photostat) and e-government services (passport, bank account,
loan, forms, applications, etc.) by low classes (especially for applying in welfare schemes) and by
middle classes (especially for job applications), Internet or computer-related services were
consequently not really requested by most of the socio-economic classes, except for accessing
examination results and for computer education by people with higher education (more than 9-10
years). The reason why digital photo and photocopy were very appreciate was there were no shops
in the surroundings of the village providing such services in order to help villagers for opening a
bank account, for availing loans and for completing forms or applications.
From telecentre-based to rural distribution network business model
As Drishtee’s co-founder, Satyan Mishra (personal communication, December 28, 2014), told me
during interview, they changed their business model from a telecentre-based to a rural distribution
network model by “start[ing] from scratch” because they felt they lacked impact with a business
model only focus on ICT:
Our experience with ICT in villages has been mixed and we have been very grateful and
very happy about the model that we pursued back in 2003-2004, which continued in 2006, it
was not the fact it was not sustainable, it was clearly sustainable and we had a sustainable
business plan to pursue and take the total numbers to 100’000 centers. The trouble actually
was in terms of the impacts, I personally was not very sure about the deep impact which
ICT can have in the village, because it was a kiosk, it was a great service in dealing points,
but it was ineffective without a physical dashboard. What you could provide is information,
what you could provide is perhaps some services, […], but it was difficult to run a very
impactful business model only on the virtual platform; that was the reason why we chose
to add more. I don’t think we abandoned the ICT business model, we stop to call ourselves
as an ICT organization because I believe it was not the intent, it was not IT the ‘end’ we
were pursuing, it was more the ‘means’ and not the ‘end’ […]](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-133-2048.jpg)
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More precisely, Satyan Mishra (Ibid.) pointed out the motive which made Drishtee change its
business model (studies on impact of Drishtee in villages), even though it was financially
sustainable (investors came) and successful (Drishtee received plenty of awards) at that time, and
the reason why they decided to start over from scratch:
I think 2006 was the year, where lots of things happened, we got a lot of awards during this
year, we got investments […] and it was also the year when we incurred some charges to
spend time in the village and we could realize what we were providing had a leveraged
impact, it was only the top 10-20% of the village population […]. We had not just started
Drishtee to just develop a business model for assets, it was all about the impact and the
community, and Drishtee realized that we were not creating that impact […]. We were all
disappointed, we were very young, and did not want to kind of just scratch the surface, we
really wanted to go deeper […]
In 2006, they therefore decided to change the business model and the strategy itself. Satyan Mishra
(Ibid.) explained me it was not an easy process and that it is still ongoing. He also told me they had
helped the Government in designing the recommendations for the Common Service Centers
(CSC’s) under its National e-Governance Plan (NeGP):
We did relook at the strategy in 2006 and the actual changes started happening from there
and continued until about 2009, because we realized what more we could do, because three
years to build an internet business model of supply chain still had [been] very unstabilized
and I would not say that it is as stable as the ICT business model we had earlier, but the ICT
part of the business continues […] The Government started ICT itself, and looked at n-
Logue model, Drishtee model, and we were part of government Committees which did
recommend 100’000 [common service] centers across in India.
However, I wanted to know why Drishtee decided to make that turnaround decision at that moment,
when their business model was financially sustainable and had been awarded several time. Satyan
Mishra (Ibid.) then answered me:
I feel like it is the best time to look at the business model […] because what we are doing
now is something which has taken a lot of time […] but stronger business model as
compared to what we had earlier, […] turning away from a very successful future at that
point, because now we are much more impactful. […] It was basically a kind of social](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-134-2048.jpg)
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question we had to answer: do we continue to focus on our own business or on the business
of the franchisees. We did kind of find that as a difficult question to answer, especially after
investments that we had taken […].
Satayan Mishra (Ibid.) explained me next what the telecentres became with the new business model
of Drishtee, which consist in several types of kiosks focused each one on one type of service. Some
still need ICT for running, especially the banking points, which are operated in partnership with
State Bank of India39
:
Several of them are now banking points, these are IT-enabled, banking extensions of the
largest bank in India, it’s a public bank, government owned bank which has its presence in
villages, and, we, Drishtee’s ICT points have become extension points […]
Furthermore, Satyan Mishra (Ibid.) confessed me the efforts for computer educations had been
stopped for the following reason:
We felt that computer education was basically taking the people away from the village. It
was difficult to find a job in the village after computer education, so we have consciously
decided to come out of it. It was a running business for us, it was really a painful decision,
but it was really important for us, because […] looking at developing village like youth for
its sustainability. […] We don’t want people to move out of the village […]
Therefore, given that interview with Satyan Mishra but also the literature review done, I can
conclude there is a real willingness at Drishtee to create an impact in rural India, not only serving
people with services and products for generating revenues but by empowering them. This vision has
been
Drishtee is now operating on the basis of a rural distribution network and not any more as
telecentre. They are still providing services for health, educatoin, banking, finance incusion, and has
rural retail points and rural BPOs. ICT is not the main part of their business, except I would say for
banking points and rural BPOs according to my skype interview with the founder, M. Satyan
Mishra. As he told me during the skype call, banking points40
have been launched by Drishtee
39
http://www.drishtee.com/strategic-solutions/financial-inclusion/
40
http://www.drishtee.com/partners/our-partners/](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-135-2048.jpg)
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Moreover, the young generation was really interested in the computer education programmes.
Drishtee had launched a very famous programmme called Drishtee’s Centre for Education and
Entrepreneurship Programme (CEEP) which helped to empower people, especially the youth of the
village through computer literacy education Computer literacy training. They could also ask the
kiosk operator questions for career councelling for instance. Self-help groups in agriculture could
also be interested in the services provided and the information they could get through the kiosk with
their relatives and friends. Information on crop prices could permit the famrers to know exactly
when to sell; they were empowered since they knew the real value of their produce and were able to
avoid corruped and unfair intermediaries (Bhatnagar, Dewan, Torres and Kanungo, 2003;
Parminder and Deepika, 2008).
9.3.2 Critical issues
SOCIO-CULTURAL AND SOCIO-ECONOMIC INCLUSION REGARDING THE
TELECENTRE-BASED SERVICES OF THE FORMER BUSINESS MODEL OF DRISHTEE
(RELATED TO A SPECIFIC RESEARCH STUDY FROM MAITRAYEE MUKERJI)
The results and conclusions you find below have been established by Maitrayee Mukerji (2013, pp.
124-130) based on a specific research study. I use this section to comment them, in order to depict
the socioeconomic and socio-cultural patterns of telecentre-based services that happened in a
specific Drishtee kiosk. Mukerji observed during its fieldwork in 2006 (Research Study 5) on a
sample of households users of the Drishtee Kiosk at Kesarpur (Uttar Pradesh), socio-economic
patterns of use of the village. One of the first observations of Mukerji regarding socio-economic
categories was that “[…] 46 households or around 70 percent had availed at least one service at the
kiosk” but “[…] the usage pattern differed across services […] – low, low-middle, middle and high
socio-economic status was 50, 67, 76 and 92 [percent of user households] respectively” (Mukerji,
2013, p. 125). According to the statistics gathered in the sample, the low socio-economic class
counted the more people without any service availed at the information kiosk (Mukerji, 2013, p.
126):
- 10 [of the total 20] households belonged to low socio-economic category.
- 19 [of the total 20] households either did not own any land or owned less than 2.5 acres.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-139-2048.jpg)
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The respective size of the farming activity also played a role: “The percentage of user households
among landless was 50 and thereafter it was 68, 83, 100 and 100 for marginal, small, middle and
big farmers respectively” (Mukerji, 2013, p. 126). In the same perspective, an asset index permitted
to distribute the households regarding the number of assets they owned: “[…] the households with
less assets access and use telecenters less than others” (Mukerji, 2013, p. 126).
Maitrayee Mukerji (2013, pp. 124-133) also defined five important socio-economic variables to
define the pattern of household use of the Drishtee Information Kiosk: the occupation, the caste, the
religion, the education and the sexe:
1. Just before we spoke about the farming that remains the major occupation. All other kind of
occupational categories used the services provided in the kiosk as they were useful, except
carpenters, masons and drivers who were 73 percent (on the basis of 11 people in this
category) without any services availed. Other occupation category (businessman, farmers,
government and others) all had about more than 70 percent of user household, except the
daily wage labour (55 percent of user household).
2. The castes were also an important indicator of the socio-economic status of a household user
in the sense it determines whether a caste is forward (Forward Castes such as Brahmins,
Pandits and Baniyas who counted to around 15 Hindi people in the village) or backward
(Other Backward Castes engaged in Zari-relatedwork (generally tailoring, designing or
embroidering), Schedule Castes, and still lower Castes). Castes were generally clustered
between each others by “kuccha brick-laid lanes” in the village (Mukeri, 2013, p. 122), so
that social interactions between them were very limited. Forward castes had the higher
pecentage of usage compared to backward castes, even though only 3 househols had been
selected in the sample (representativeness but non-significativeness for conclusions).
3. The religious communities were finally an important element of difference regarding
segregation: “Comparatively, Hindus were more segregated in terms of caste and
occupation” (Mukerji, 2013, p. 121). Only the Schedule caste among the three castes of the
Hindus (General, OBC and SC) had a low percentage of kiosk users, while the only
representative caste of the Muslims (OBC), mainly active in agriculture and embroidering,
had a very low percentage of kiosk users (41 percent) compared to the same caste of the
Hindus (90 percent). Mukerji explained it was related to the occupations of the two religious
communities:](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-140-2048.jpg)
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FINANCIAL SUSTAINABILITY OF THE ENTREPRENEURS
Satyan Mishra (personal communication, December 28, 2014) explained me the lack of control
Drishtee had on the entrepreneurs with the franchise business model by the past:
I can tell you for sure that 20 percent of our entrepreneurs at any point of time were not
sustainable; It was not just the issue of the choice of the entrepreneur, but also the choice of
the area and the geography, because all jobs have all not enough needs for ICT-enabled
services.
He further explained me the importance to focus on the generation of income, what Drishtee has
done now with the new business model focused on the rural distribution network:
It is important to provide income to the community and not just savings,which come out
localizing services; income generation was very important, which we realize and we are
focusing our rest of energy on.
I also asked him what they did with the entrepreneurs to make them manage better the kiosks. He
answered me about trainings and programme initiatives launched by Drishtee
In 2003, we launched a programme called Mission 6K […] in which we ensured that every
entrepreneur was capable of earning Rps. 6,000 per month out of Drishtee. This Mission 6K
was also supported by World Bank, then they gave us an award it was for that particular
Mission 6K, which we had. That programme led us to develop lots of services […] the core
benchmark of judgment was on the basis of small fees that they were paying us on a monthly
basis. It was called […] We encouraged them to keep time on how much they are earning. It
was very clear to us based on the data that we used connect: How many of them are earning
[…] All the data was being tracked, and we could make an assumption. It was not like we
would be absolutly accurate but we could make an assumption on how much they were
earning. At least, there was a minimum earning they were having. It was a good indicator
for us to know the income level of our entrepreneurs.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-142-2048.jpg)
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Jai Asundi next argued positively on the role ICT could play as facilitator by underlining the
importance of wide access and appropriate content in addressing the people:
ICT is the only way given the vastness of India and the lack of resources to bridge it in any
of the traditional ways. In many cases the divide is due to lack of access and appropriate
exposure. Once that hurdle is overcome the divide will be easier to overcome. (Jai Asundi,
personal communication, December 21, 2014)
Tim Unwin finally raised that same processes cause the differences between towns and countryside
and difference of connectivity, and explained me that digital divide could in some ways be crossed
and bridged by development initiatives. Regarding the capacity of ICT to bridge by itself
inequalities and divides, Professor Unwin stated like the other interviewees:
ICT is an accelerator. […] All the evidences say that it increases rather than reduces [the
divisions] […]. The differences between men and women have been [for example] a bit more
significant. […] ICT still have potential to change things, but let by itself ICT increases the
inequalities. (Tim Unwin, personal communication, January 5, 2015)
10.2 Socio-cultural and socio-economic empowerment
It was amazing to learn during my work that plenty of ICT initiatives (national, regional and local)
had been implemented since 1990’s in different regions of India in terms of e-agriculture, e-health,
e-education, e-governance, etc. by different types of agency (public sector, private sector, civil
society organizations and private-public partnerships) and had led to different outcomes in terms of
socio-economic empowerment. A knowledge community can emerge from the access, use and share
of information and knowledge between villagers for answering contextual issues related to their
local ecosystem. Villagers can especially learn in areas they are concerned about: agriculture,
health, education, etc. and ICT can in that case empower the less informed and educated. It is
especially the opportunity to get in touch with the knowledge world that mainly interest the young
generation (main users).](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-147-2048.jpg)
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The kiosks have hence the important mission to open the world of knowledge economy to large
number of poor and disadvantaged people who could not get access to ICT individually and
facilitate their access to services:
In many cases, a kiosk brings to the villager information that once was practically
unavailable, and services that took days of costly travel are now within biking. One study43
showed that each kiosk typically saves a village $15,000 annually in costs of trips into town
and lost wages. (Toyama and al, 2004, pp. 4- 5)
Moreover, resulting from the ICT4D movement and transformational discourse of the 2000’s, they
have been considered as “tools” for empowering the poorest people, the women and other
minorities which were excluded from the knowledge society before the kiosk implementation
because of the existing divides in India between areas, gender, castes, socio-economic classes and
literate/non-literate people
As Maitrayee Mukerji mentioned, on the basis of her literature review taking into account the
patterns of access and use (Dossani, Jhaveri and Misra, 2005; Pal, 2007; Tiwari, 2008, cited by
Mukerji, 2013, p. 50), the socio-economic impacts resulting from telecenters at any location have
however been limited. As Mukerji then explained:
A general observation is that it is difficult to establish the causal link between provision of
technology, information and services to specific socio-economic indicators. (Mukerji, 2013,
p .50)
Based on four types of indicators (venue performance and sustainability, users, usage patterns and
downstream impacts), Sey and Fellows (2009) concluded similarly to a limited and elusive evidence
on downstream impacts and noted the difficulty to identify and measure the impact of the public
access ICT model. Similarly, Tim Unwin (personal communication, January 5, 2015) told me
during the interview that “there is no consistent mechanism for evaluating success […] Judging
success is challenging.” We have therefore to keep in mind no best practice does exist.
43
Based on a 2004 study by Digital Partners and Intel that polled 30 kiosks in three states with village populations
averaging 5000 residents. Source: Toyama and al, 2004, p. 5](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-148-2048.jpg)
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The promise of rural empowerment envisioned by ICT4D has therefore not been always possible
depending on the way the business model of the ICT-enabled initiative was designed and
implemented by the network agency, managed by the kiosk entrepreneur and supported by
stakeholder partnerships, but in some cases, however, initiatives really empowered disadvantaged
groups at certain extends (i.e. e-governance project, e-literacy initiative) as Rajindra Ariyabandu
underlined:
Telecentre networks have taken the social responsibility of empowering rural women. In an
inclusive Indian society, women are suppressed in the public domain. Role of the telecentre
network and the involvement of the government have created a space for women to be active
partners in the new information society. In Kerala, participation of women in the e-literacy
programme has increased due to the confidence built by the state and the telecentre
network. (Ariyabandu, 2009, p. 17)
The empowerment could also be for women the result of taking the opportunity of the kiosk
management, in order to enhance her inclusiveness in the knowledge society as female and attract
other women in the kiosk for them to be empowered as well:
Many kiosk operators are women, and for them, the kiosk represents an empowering
livelihood outside of traditional village roles. (Toyama and al, 2004, p. 6)
Regarding now the possibility to have a private agency running a business exclusively focused on
social development goals rather than on business goals, Professor Unwin answered me as follows:
I can come close to arguing that actually, it’s almost impossible for the private sector [by
itself] to deliver solutions in rural areas, because that is the private sector that is causing
the differences between rural and urban areas in the first place. (Tim Unwin, personal
communication, December 5, 2014)
Therefore, if ICT only serves the business model for private and economic interests, it does not
make any sense for socio-economic development of “trickle-down” communities. I really think this
could be the case of ITC Limited which is owned by corporate shareholders whose main interest is
return on investments (ROI). In the case of Drishtee, I am personally convinced after my literature
review and the interviews conducted, it is truly a social enterprise: it is not looking for maximizing](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-149-2048.jpg)
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profit but rather for maximizing empowerment impact, even though they take into account
financials to remain operationally sustainable over time.
10.3 Scalability
Regarding scalability, Professor Unwin told me most of the initiatives are designed and run for
some village as pilot project, and that they then do not work for thousands as they are not designed
at scale. He explained me that as follows: “You actually have to design a solution at scale […] You
have got to deliver to one thousands, how are we going to do it?” (Tim Unwin, personal
communication, January 5, 2015)
However, I asked myself whether the franchise model was the adequate model for scaling a
business model. Satyan Mishra (personal communication, December 28, 2014) told me he believed
“franchising business is perhaps something which all of us have learnt out of ICT, it has been a
great gift of ICT to all social organizations.” He continued by arguing “franchising in villages is
perhaps the only way you can make a business model sustainable” and finally told me franchising
was the key to scalability of Drishtee: “We are still completely focused on the franchising business;
Whatever can be franchised, can be scaled, that is the mantra that we have.”
Therefore, during the interview with Professor Unwin, I asked him if the franchise model was the
best model according to his expertise to scale a business in rural India. He logically and simply
answered me he didn’t like “best” and “to scale” but that “good practices” in default of “best
practice” could be helpful for designing initiatives:
There are a lot of good models and good practices that people can learn from and design
the practice that works best, if you like, in their own context […] We should have good
practices that people could draw up. (Tim Unwin, personal communication, December 5,
2014)
C.K. Prahalad, Professor in Corporate Strategy, raised the same observation in the foreword of the
book Making the Connection: Scaling telecenters for development (Fillip and Foote, 2007) by
enlightening the importance to consider the business environment first:](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-150-2048.jpg)
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There is no “correct” way to implement a telecenter, no single “best” business model, and
no “perfect” combination of features. Each environment is different, and the local players
need to know their audience, determine their objectives, and seize the opportunities that best
match local conditions—this is “consumer-centric” design at its best. We can call this Co
Creation of solutions where the consumers (the poor) have a significant say in developing
the solution. (Fillip and Foote, 2007, foreword II)
In conclusion, scalability is essential if any business model envisions a wide impact, but we should
however not forget there are two dimensions possible: quantitative scale-up and
qualitative/contextual scale-up. It makes no sense to scale the same business model’s features
everywhere, thinking it will replicate the same outcomes: quantitative scale-up. It will definitely not
take into account that different contexts need different answers (see section on value propositions).
This observation indeed makes total sense compared to the lessons learnt through the cases and the
literature review previously explored. There is definitely not a best practice or a business model to
be followed and applied everywhere in the same way. The local context remains particularly
important, especially in India where the socio-cultural and socio-economic features differ very
much dependently on the caste, the gender, the socio-economic status, the location (urban/rural and
State) and policy.
10.4 Sustainability
The sustainability question is a very tricky question to answer. What really means sustainability? It
means looking for the ways of delivering right and adapted ICT services cheaply and effectively at
the village level and on the long run. More especially, it says that “development efforts should be
economically or commercially self-sustaining eventually, and that preferably they should be made
sustainable through some kind of market mechanism [...] [so that] IT should be promoted with as
limited an intervention as possible to overcome barriers that were keeping a market from
developing on its own.” (Kendall and Singh, 2006, p. 2)
However, most studies have shown that low income environments encounter a critical challenge to
offer the adequate environment for commercial services to take place (Sey and Fellows, 2009).](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-151-2048.jpg)
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The marketability of information services can be improved and diversified (e.g. market
information, advising information, weather information, etc.);
The offer-driven approach can be changed and address the villagers collectively instead of
individually (e.g. membership fee, indirect revenue generation, etc.);
The partnership with an existing local business or social organization helps in developing a
viable business model to serve villagers with new services.
The value proposition should therefore be customer-oriented and locally driven depending on the
socio-cultural and socio-economic context of the community targeted; so that the services provided
by the kiosks have to be aligned to the rural needs and demand. Contextual issues play here a
significant impact on the successfulness of the private and for-profit model from implementation to
replication. Business opportunity is related to local demand. It is therefore necessary to take enough
time before franchising the business model. This “bottom up” and “demand-driven” approach is in
preference the best way to foster rural development, as it answers at best the right and specific
needs according to the rural village in which the kiosk is located and reflects the community’s
willingness to pay the services provided by the kiosk. It means identifying the existing opportunities
within the communities and translating them into co-created solutions which implied them to
participate in the design process:
Since communities are the closest to grassroots’ problems, they are the best judge to
evaluate technology alternatives and provide innovative solutions for the problems of their
respective areas. (Malhotra, Chariar, Das and Ilavarasan, p. 219)
The ability to use ICT is therefore better if a “bottom-up” approach instead of a “top-down”
approach is used. It is exactly what ITC learnt with e-Choupal as argued Prahalad and Krishnan
(2011, p. 14): “The services and solutions offered had to be what the village needed rather than
what ITC believed would be good for that particular village.” Satyan Mishra (personal
communication, December 28, 2014) clearly agreed with that observation by telling me that he
thought “ITC e-Choupal had a better business model at that time [than Drishtee] because it was not
just about providing information, it was also about sourcing products.”
During the interview, Professor Unwin (personal communication, January 5, 2015) explained me
how much it was important and critical for success to involve the local people in the design process](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-155-2048.jpg)
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of the ICT-enabled initiative since those communities are the best to identify what they need the
most and would then have willingness to pay for:
You have to involve the intended recipients in the design programme. These programmes
should not be designed like in developed countries, without knowing the local problem
encountered and how solutions could answer them. You have to live in the village and
understand the context. It would be kind of product learning. […] It’s a mantra approach.
[…] Poor people know more than [ICT-enabled initiators] do about what being poor is like
and what they need. So I think that it’s absolutely essential [to understand]. […] Poor
people will pay to something that they think is a value. There you need incentives for the
private sector to develop them. It could be subsidized.
In that sense, as Dossani, Misra and Jhaveri (2004, p. 4) underlined, “community-based
organizations understand user needs the best and are also the best-organized to provide it.”
Therefore, they should be included in the process of co-creation of the private and for-profit
operator.
Finally, some evidence confirmed the reason why a service for development purposes is used by
villagers. In that sense, adequately and consistently addressed value propositions encountered a
higher chance to succeed (Sey and Fellows, 2009, p. 9):
While Menon et al (2006) found that e-government, veterinary and healthcare services
constituted less than 10% of the use of rural PC kiosks in India, they also concluded that use
of such services is high at locations where they are offered consistently.
10.4.3 Partnerships and regulation
Government services can also be supported by the ICT-enabled kiosks. As a result, the kiosks can
serve as points of contact because they act as intermediaries in the relationship between the
government and the citizen. Thus, e-government services can complement the bunch of services
provided by the kiosk and play the key role of “pump-primer” for regularly attracting people to the
kiosk.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-156-2048.jpg)
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The private and commercial model tends to have limited social impacts as seen previously because
of priority focus given to commercial services. It is very tough to both target the social
sustainability and the financial sustainability. Therefore, private sector models can benefit from
public involvement in their ICT projects, in order to build their capacity (e.g. cost sharing,
development of content providers, local content, etc.) and impact (in terms of customer service and
suited marketing) related to the needs of the villagers. A good example is here the Akshaya centers
in Kerala: “[…] Each took on approximately 1,000 learners and collected the equivalent of US$3.26
per learner for providing a basic computer course developed by the state’s IT mission” (World
Bank, 2009, p. 24). It resulted from the situation that “[…] the local government covered part of the
cost (US$2.79), as did the learners (US$0.47) [and] in about a year, the private entrepreneurs had
recovered their initial investment” (World Bank, 2009, p. 24).
Private public partnerships (PPP) have then to be considered, in order to reinforce the sustainability
of the business models. As the private sector is more focused on the innovation and the operations
by nature in order to assure the financial sustainability of the kiosk, the public sector should bear an
important part of the responsibility in the social development role of the kiosk for the goodness of
the rural community. Empirical evidence has also proved it is not a good idea to exclusively
dedicate the funding of telecenters to the public sector as they offer “not a good sustainability
formula, financially or politically” (Colle and Roman, 2002, cited by Harris, Kumar and Balaji,
2003, p. 9).
According to Professor Unwin, the umbrella agency in multi-stakeholder partnerships should
however be the public sector “[…] because the public sector the only sector that theoretically serves
the interests of all people”. It is currently for instance kind of embodied into CSC’s in rural India
now. Synergies and partnerships can in that sense be developed in order to scale-up ICT in rural
Figure 69 - Dimensions of telecentre sustainability: input-output definitions
(Masiero, 2011)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-157-2048.jpg)
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doesn’t matter.” (Tim Unwin, personal communication, January 5, 2015) Moreover, frugal
innovation is also necessary to optimize for instance the energy demands of ICTs and in turn
increase the affordability of the energy cost in rural areas. They have to be complement with
regulations, in order to ensure appropriate tariff structures in rural India and then provide universal
access. However, it is tough to enable affordable solutions in rural and remote areas “[…] where
usage rates are low and therefore service provision unprofitable.” (Unwin, 2009, p. 366)
For instance, the corDECT wireless technology developed locally by the ITT, Chennai, and not
imported as it used to be the case by the past, pushed down the cost of the connectivity model of n-
Logue. As we previously explained, this technology allowed n-Logue to provide local ICT
computing adapted to the context of India by answering the problems of remoteness, the lack of
infrastructure and the cost of technology in rural areas.
10.4.5 Kiosk entrepreneur capacity
The kiosk entrepreneur capacity is another critical factor for the sustainability of the private and for-
profit model based on pc kiosks. It is essential to set up employment and training practices in order
to sustain staff capability for running the pc kiosk in the right way on the long run. Efforts of the
kiosk entrepreneur can contribute to foster social inclusion (Toyama and al, 2004, p. 6).
Entrepreneurial skills for sales and marketing are furthermore important for the kiosk entrepreneur
in order to efficiently be able to manage and market the bunch of services provided to the villagers.
Research Study 6 underlined the fact kiosk customers enlightened more than on average bad kiosk
operator’s performance:
70% of kiosk customers report that the kiosk operator handles all transactions on the
computer, and that they remain unable to use a computer. (Toyama and al., 2005, p. 5)
Furthermore, based on their empirical study, Kendall and Singh (2006) showed other socio-cultural
factors also played a significant role in the success of a village kiosk. Particularly, it has been
enlightened the caste designation of the kiosk operator did significantly impact on profits in
function of the local social norms and practices in effect in the region. On the opposite, selection](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-159-2048.jpg)
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process and training of the village-level entrepreneurs could counter some challenges such as
gender bias as the authors said. Therefore it remains very important to consider an adequate
business model which overcomes these diverse issues.
10.4.6 Awareness, capacity and affordability of the BOP
Capacity of the villager is finally very important as well. However, rural communities, as we
pointed out in this work are not always able to be aware of the advantages they could retrieve from
accessing ICT and they are also often not able to use them. It has been proved that for ICT
initiatives where training had been incorporated, the rate and speed of adoption of the ICT use were
higher (Gunasekera and Miranda, cited by Grimshaw and Kala, 2011).
Awareness is the first step to overcome. The kiosk entrepreneur capacity can permit to raise
awareness of the villagers about the ICT-enabled kiosk and the bunch of value-added services
provided. Research Study 6 showed that social networks can be a powerful driver:
Kiosk marketing appears most effective through word of mouth, with over 60% of
respondents having chosen to make their first visit to a kiosk based on hearing from friends
and family. As most kiosk operators make some effort to market services to their
communities through village assemblies or through pamphlets, so this reflects theories of
diffusion of innovation that emphasize the importance of personal networks in technology
adoption. […] (Colle and Roman, 2001, cited by Toyama, Kiri, Menon, Pal, Sethi and
Srinivasan, 2005, p. 5)
The ability to understand and use ICT is nevertheless better if the people understand and appreciate
the value from using the technology for needs and requirements which concern them in priority.
This is what ITC learned with e-Choupal as argued Prahalad and Krishnan (2011, p. 14):
One of the lessons ITC had learned from e-Choupal 1.0 was that adoption was quicker when
the value creation opportunity was clearer to the farmers. This was based on the premise
that people’s intuitive ability to use technology is very different if they understand and
appreciate the value from the use of new technology. Therefore, ITC first focused on](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-160-2048.jpg)
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demonstrating the value of the mobile business model, and then rolled out the mobile
technology platform. […]
Affordability of the villagers certainly remains the most important criterion to impact the
sustainability of an ICT-enabled kiosk. The Microsoft’s review of research on pc kiosks (2007)
showed the economic viability is difficult since the kiosk services (pay-per-transaction or pay-per-
use) are often overcharged compared to the willingness-to-pay for them.](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-161-2048.jpg)
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11. Conclusion
We can say that the private and for-profit model of ICT-enabled kiosks can offer digital solutions to
rural and remote areas of India by providing access to their marginalized communities and feeding
them with information and communication technologies. It permits to decrease the isolation of these
communities to the worldwide web and opens the relationships between them and the outside world
notably through commercial services (B2C2B) and e-government services (G2C2G). ICT-enabled
kiosks can in that sense help them by kind of e-inclusion to substitute the lack of infrastructures and
institutions in remote and rural areas, and they may in some ways enable social inclusion, regardless
of caste, gender or socio-economic situation. Even though research studies show a large part of
telecenter initiatives have generally got limited empowering impacts on the rural communities, we
pointed out that the value propositions of the business model, the multi-stakeholder partnerships of
the network agency and especially the human capacity of the kiosk entrepreneur integrating the
whole community could overcome certain barriers, both for the sustainability and the rural
empowerment of the initiative.
The question was hence to know whether the telecenter initiatives had to follow some guidelines. It
goes back to the question of success criteria of an ICT-enabled initiative I asked Tim Unwin about
during my interview with him. He answered me the criteria any designer of ICT-enabled initiative
should pay attention were essentially political, social, cultural and economic criteria; and that
connectivity and electricity should be considered in priority, since ICT-enabled initiatives don’t
exist reliably or fail before they started “if you don’t have the basic infrastructure at the first place
[…].” (Tim Unwin, personal communication, January 5, 2015)
Based on my literature review, the interview conducted and the three cases studied, I have
consequently been able to answer the question and identify the success criteria of the private and
for-profit model of ICT-enabled kiosks:
1. Field analysis: Identify and understand the socio-economic and socio-cultural context.
2. Infrastructure: Assure connectivity and electricity are available.
3. ICT policy: Leverage the public sector to be a facilitator or to implement ICT-D policies
and partnerships (e-governance)](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-162-2048.jpg)
![189
His latest collaborative book, entitled simply ICT4D, was published by Cambridge University Press
in 2009. He is a Fellow of Education Impact and Honorary Professor at Lanzhou University,
China. (Source: http//:ww.itu.int/)
i
Software technology is the instructions, programmes, or suite of programmes which are used to
direct the operation of a computer, or other hardware (meadows et al., 1987, cited in Heeks, 1996,
p. 26). Source: Mukerji, 2013, p. 243
ii
Hardware technology is the mechanical, magnetic, electronic, and electrical components making
up a computer system (Heeks, 1996, p. 26). Source: Mukerji, 2013, p. 243
iii
The GITR series has been published by the World Economic Forum in partnership with INSEAD
since 2002. The Global Information Technology Report 2014 features the latest results of the NRI,
offering an overview of the current state of ICT readiness in the world. This year’s coverage
includes a record number of 148 economies, accounting for over 98 percent of global GDP. The
GITR has accompanied and monitored ICT progress for more than a decade and raised awareness
of the importance of ICTs for long-term competitiveness and well-being. Source: Bilbao-Osorio,
Soumitra and Lanvin (eds.), 2014, preface v.
iv
The DOI is a standard tool that governments, operators, development agencies, researchers and
others can use to measure the digital divide and compare ICT performance within and across
countries. […] The DOI has been compiled for 181 economies for a period of three years from
2004-2006. An even longer time series for 62 leading economies for the period 2000-2006 is also
available. Source: http://www.itu.int/ITU-D/ict/doi/index.html, retrieved November 26, 2014
v
GDP at purchaser's prices is the sum of gross value added by all resident producers in the
economy plus any product taxes and minus any subsidies not included in the value of the products.
It is calculated without making deductions for depreciation of fabricated assets or for depletion and
degradation of natural resources. Data are in current U.S. dollars. Dollar figures for GDP are
converted from domestic currencies using single year official exchange rates. For a few countries
where the official exchange rate does not reflect the rate effectively applied to actual foreign
exchange transactions, an alternative conversion factor is used .
Source: https://www.data.worldbank.org, retrieved November 26, 2014
vi
PPP GDP is gross domestic product converted to international dollars using purchasing power
parity rates. An international dollar has the same purchasing power over GDP as the U.S. dollar
has in the United States. GDP is the sum of gross value added by all resident producers in the
economy plus any product taxes and minus any subsidies not included in the value of the products.
It is calculated without making deductions for depreciation of fabricated assets or for depletion and
degradation of natural resources. Data are in current international dollars. For most economies
PPP figures are extrapolated from the 2011 International Comparison Program (ICP) benchmark
estimates or imputed using a statistical model based on the 2011 ICP. For 47 high- and upper
middle-income economies conversion factors are provided by Eurostat and the Organisation for
Economic Co-operation and Development (OECD). Source: https://www.data.worldbank.org,
retrieved November 26, 2014](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-197-2048.jpg)
![192
employed entrepreneurs while the remaining 19 were being run by the local NGO mentioned above.
Source: Kumar and Best, 2006, pp. 2-3
xiv
Broadband connectivity project: […] In late 2010, Telecom Regulatory Authority of India
(TRAI) proposed the National Broadband Plan (NBP), an ambitious project that aims to use Rs 600
billion of investment to bring high-speed connectivity to PCs in 160 million households. The plan
outlines setting up of State Optic Fibre Agencies (SOFA) in each state and another National Optic
Fibre Agency (NOFA). Under the NBP, the Bharat Broadband Network Limited (BBNL), a special
purpose vehicle, was set up by the government. The objective of BBNL is to manage and operate the
National Optic Fibre Network (NOFN). The NOFN will eventually provide connectivity to 250,000
Gram Panchayats. If realised, it has the potential to transform many aspects of India, including
areas such as education, business, entertainment, environment, health households and e-
governance services […]. Source: http://tech.firstpost.com/news-analysis/indias-fantastic-
broadband-project-that-you-should-know-about-81871.html, retrieved November 22, 2014
xv
E-governement: The term e-government is generally used to describe the delivery of services via
network technologies to citizens, businesses and government agencies such as customs clearance,
tax payments or licence processing. It encompasses both the ‘front-office’ and ‘back-office’ use of
ICTs to support the business processes that a government performs, typically the provision of
information and services (see Anttiroiko and Malkia, 2006; Cordella, 2007; Department of
Economic and Social Affairs, 2007). Source: Unwin, 2009, p. 283
xvi
The OMC provides a user-friendly interface to the system administrator/Operator. OMC
handles system administration, maintenance, call control, billing, traffic measurement and
subscriber functions. Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014
xvii
The BSD is an optional unit used for the remote deployment of base stations through an E1 link
over microwave, fiber or copper links. Each BSD can support upto four base.
Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014
xviii
The Relay Base Station extends the range of the DECLoop™ system by relaying DECT
packets between the CBS and subscriber units. The RBS can handle 11 calls simultaneously.
Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014
xix
The CBS is a small, unobtrusive pole or wall mounted unit providing 12 simultaneous speech
channels. Each CBS can serve 30-70 subscribers and to cater for high subscriber densities, several
CBSs can be co-located. Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014
xx
The DIU is a DECT exchange for wireless subscribers and provides an interface to the Public
Switched Telephone Network (PSTN). Functions such as call processing, CBS powering and
PCM/ADPCM transcoding are handled by the DIU.
Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014
xxii
The ReMeDi system was developed by the Neurosynaptic Communications Private Ltd. in
Bangalore, India. The kit includes the following main parts:
ReMeDi Kit – The main box with LED indicators for the measurement](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-200-2048.jpg)
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The ReMeDi toolkit provides software application functionality for viewing the parameters
measured from each of these probes. It also provides functionality for storage, viewing and
reporting on various historical measures for the patient.
Source: Dakshinamoorthy and Gordon, 2007, pp. 5-8
xxiv
The 73rd and 74th Constitutional Amendments have conferred the right on every registered
voter to directly participate in Governance. The Gram Sabha and Ward Sabhas are the
institutionalized foundations for decentralized participatory democracy. The Gram Sabha and
Ward Sabha have to play a key role in rendering the Gram Panchayat transparent and directly a
accountable to the people. The Grama Sabha is a means to solve people’s problems and felt needs
and to decide how to use the available resources optimally in ways desired by them, to benefit the
poorest in the village through direct democratic and participatory planning. The role of Gram
Sabha is vital in bringing good governance in the local self governments. […]
Source: http://wikieducator.org/Apard/Gramsabha, retrieved December 7, 2014
xxv
Drishtee kiosk at Kesrapur in Bithri Chainpur taluka [Uttar Pradesh] was located 22
kilometers from the district town of Bareilly in the northern state of Uttar Pradesh, India. It had an
area of 90.25 sq kms and population of 3771 in 586 households (Government of India, 2001). The
sex ratio was 874. Kesarpur was a fairly large village as compared to its neighbouring 20-5
villages and acted as a junction point for the cluster of villages. It was not well connected by road
and various modes of transport with neighbouring vilages and big towns like Bareilly, Rithura, et.
and hence attracted people from nearby rural and urban areas.[…] While the village had no](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-202-2048.jpg)
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cellular service providers, but being proximate to big towns, signal was available at most places
and hence mobile phones were fairly common. The village was electrified in 1976 and 80 per cent
of the houses had electricity connections.[…] At Kesarpur, households belonging to the same
religion or caste community were clustered at one place and, each custer was separated from the
other by kuccha brick-laid lanes. In general, social interactions between middle- and upper-class
families of both the religion communities were very limited. […] The children and women hesitated
to move around freely in the area dominated by other communities. Most women especially those
belonging to Muslim communities, rarely ventured out of the boundaries of their own immediate
communities. […] Source: Mukerji, 2013, pp. 120-122](https://image.slidesharecdn.com/addc0714-2b43-4f93-8c44-e336fb974380-151123133209-lva1-app6892/75/ICT-for-Development-in-Rural-India-203-2048.jpg)
ICT for Development in Rural India
- 1. Can ICT DriveDevelopment in Rural India Through the Private and For-Profit Model of ICT-Enabled Kiosks? Case Studies of ITC e-Choupal, n-Logue and Drishtee Sébastien Bianchi Master in Information Systems HEC Lausanne Professor: Alessandro Villa Expert: Christine Lutringer-Gully Lausanne, academic year 2014 – 2015 This work is jointly carried out under the Master in Information Systems at HEC Lausanne and the Minor in Area and Cultural Studies at EPFL.
- 2. Acknowledgements I would liketo thank all the people who supported me in the completion of this final Master thesis. First and foremost, I am grateful to my supervisor, Professor Alessandro Villa from HEC Lausanne, and to my expert, Professor Christine Lutringer-Gully from EPFL; they have been source of support and guidance. Moreover, this Master thesis would not have been complete without the contribution of different personalities I interviewed from December 2014 to January 2015: Sarat Chandra, Anshuman Bahadur Saxena, K. M. Baharul Islam, Maitrayee Mukerji, Rajendra Kumar, Jai Asundi, Satyan Mishra and Tim Unwin. Furthermore, it is a real pleasure to acknowledge Tania Balderas for her contribution to the reading and correcting of my English, as I am not a native English speaker/writer. Finally, I really appreciated the support of my sister, Caroline Bianchi, and my flatmate, Verena Spierer, for proof reading my work and for their insightful commentary.
- 3. Abstract This academic thesistakes into consideration the case of India which represents a developing country that is making a considerable investment in information and communication technologies (ICTs) for over a decade. This country presents a significative urban-rural divide related to underpriviledged socio-economic conditions in rural areas in contrast to the more favorable socio-economic conditions of urban areas. In fact, rural India counts over 700 millions inhabitants (around 70% of the population) but generates not more than 20% total GDP. ICT can be decomposed into four dimensions (4 C’s framework) which serve as shift levers for bridging digital divide in India: computing, connectivity, content and capacity (human). Sub-factors of the urban-rural divide affecting the nature of digital divide can then be identified by observing their relationship with the sociocultural and socioeconomic situation of rural India: awareness, availability, accessibility and affordability. There are, however, plenty of ways or models to strengthen rural livelihoods; the one I chose to examine in this work is the private and for-profit model of ICT-enabled kiosks as it aims at scaling a business model into small businesses very quickly, while making them self-sustaining. Through three case studies, which are ITC e-Choupal (currently still operational), n-Logue (no longer operational) and Drishtee (still operational but evolved), critical issues encountered with that model for bridging digital divide and driving socio- economic development in rural India will be discussed: sustainability and scalability of the business model, adaptability and affordability of the services provided, innovation of the infrastructure and the connectivity model, awareness of the villagers and training and affordability of the village-based entrepreneurs. There is not a simple answer to the question asked in the title of this thesis; nonetheless, it is somehow possible to state that no private and for-profit model based on ICT can survive if it does not effectively consider at least one of the four sub-factors of the digital divide previously cited. Keywords: ICT, rural India, digital divide, ICT-D/ICT4D, ICT-enabled kiosks, e-Choupal, n-Logue, Drishtee.
- 4. Contents Acknowledgements ...................................................................................... 1 Abstract................................................................................................... 2 Figures .................................................................................................... 6 1. Introduction............................................................................................ 1 1.1 Points of interest................................................................................... 2 1.2 Methodology....................................................................................... 3 1.3 Limitations......................................................................................... 4 2. Literature Review...................................................................................... 5 3. ICT in India ...........................................................................................11 3.1 Introduction to Information and Communication Technology (ICT)..........................11 3.2 The 4C’s framework .............................................................................12 3.3 Measuring ICT ...................................................................................13 3.4 Context of India ..................................................................................17 3.4.1 The country: some statistics.................................................................17 3.4.2 Urban-rural divide...........................................................................19 3.4.3 Other divides: castes, gender and states ....................................................23 3.4.4 The resulting digital divide .................................................................28 4. Bridging digital divide and driving development ...................................................36 4.1 How to bridge digital divide?....................................................................38 4.1.1 Computing ...................................................................................38 4.1.2 Connectivity .................................................................................39 4.1.3 Content.......................................................................................39 4.1.4 Capacity......................................................................................40 4.1.5 ICT policy....................................................................................40 4.2 ICT for Development (ICT4D) vs. ICT and Development (ICT-D)...........................43 4.2.1 ICT4D........................................................................................43 4.2.2 ICT-D ........................................................................................45 5. The private and for-profit ICT-enabled kiosks......................................................46 5.1 Definition of ICT-enabled kiosks................................................................46 5.2 ICT-enabled kiosks: emergence and evolution of the movement..............................47
- 5. 5.3 ICT-enabled kiosks:the movement in India ....................................................50 5.4 Separations at the “Bottom of the Pyramid” ....................................................52 5.5 The private model ................................................................................57 5.5.1 The corporate model ........................................................................58 5.5.2 The franchise model.........................................................................58 5.6 Typology of services .............................................................................59 5.6.1 Agriculture...................................................................................60 5.6.2 Education ....................................................................................64 5.6.3 Healthcare....................................................................................65 5.6.4 E-government services ......................................................................68 5.6.5 Financial and utility services................................................................69 6. Introduction to the case studies ......................................................................70 6.1 Source of data ....................................................................................70 6.1.1 Secondary data...............................................................................70 6.1.2 Primary data .................................................................................73 6.2 SWOT analysis ...................................................................................73 6.3 Methodology......................................................................................74 7. Case study 1: ITC e-Choupal ........................................................................75 7.1 Context of implementation.......................................................................75 7.2 Business Model...................................................................................77 7.3 Rural empowerment..............................................................................83 7.3.1 Achievements................................................................................83 7.3.2 Critical issues ................................................................................92 7.3.3 SWOT........................................................................................95 8. Case study 2: n-Logue................................................................................96 8.1 Context of implementation.......................................................................96 8.2 Business Model...................................................................................99 8.3 Rural empowerment............................................................................105 8.3.1 Achievements..............................................................................105 8.3.2 Critical issues ..............................................................................112 8.3.3 SWOT......................................................................................118 9. Case study 3: Drishtee..............................................................................119
- 6. 9.1 Context ofimplementation.....................................................................119 9.2 Business Model.................................................................................121 9.3 Rural empowerment............................................................................128 9.3.1 Achievements..............................................................................128 9.3.2 Critical issues ..............................................................................131 9.3.3 SWOT (on the telecentre-based model of Drishtee).....................................136 10. Discussion .........................................................................................137 10.1 Digital divide..................................................................................137 10.2 Socio-cultural and socio-economic empowerment..........................................139 10.3 Scalability .....................................................................................142 10.4 Sustainability..................................................................................143 10.4.1 Financial sustainability ..................................................................144 10.4.2 Value propositions .......................................................................146 10.4.3 Partnerships and regulation..............................................................148 10.4.4 Technical capacity .......................................................................150 10.4.5 Kiosk entrepreneur capacity.............................................................151 10.4.6 Awareness, capacity and affordability of the BOP .....................................152 11. Conclusion.........................................................................................154 12. References .........................................................................................158 12.1 Works..........................................................................................158 12.2 Websites .......................................................................................170 13. Appendix ..........................................................................................173 13.1 IDI (2007 and 2002) ..........................................................................173 13.2 IDI access sub-index (2007 and 2002).......................................................174 13.3 IDI skills sub-index (2007 and 2002) ........................................................175 13.4 ICT Price Basket 2008........................................................................176 13.5 Statistics of states of India: Population, Area, Rate of literacy (2011) .....................177 13.6 Statistics of states of India: Area, Rate of literacy and IMR (2011)........................178 13.7 Statistics of states of India: Area, Rate of literacy, ICT appliances (2011) ................179 13.8 How ICTs can help achieve MDG?..........................................................180 13.9 Separations at the “Bottom of the Pyramid”.................................................181 13.10 Examples of ICT applications in rural contexts............................................182
- 7. 13.11 Research Study2: regressions and graphs .................................................183 13.12 Interviewing guide: Frequently asked questions ...........................................186 13.13 Biographies of the interviewees ............................................................187 Figures Figure 1 - Networked Readiness Index (WEF, 2014)..................................................................... 14 Figure 2 - Digital Opportunity Index (ITU, 2006).......................................................................... 14 Figure 3 - 2007 ICT Opportunity Index: sub-indices and indicators (ITU, 2007) ........................... 15 Figure 4 - IDI and ICT Price Basket comparison (ITU, 2009)........................................................ 15 Figure 5 - Top ten economies - broadband Internet sub-basket (2008) (ITU, 2009) ....................... 15 Figure 6 - ICT Development Index - Weighting of indicators (ITU, 2009) .................................... 16 Figure 7 - Three stages in the evolution towards an information society (ITU, 2009)..................... 16 Figure 8 - Evolution of the digital divide between IDI groups, 2002-2007 (ITU, 2007) ................. 16 Figure 9 - IDI sub-indices by level of development (2002-2007) (ITU, 2007)................................ 16 Figure 10 - Some statistics about India, 2000-2012 (World Bank, 2014) ....................................... 17 Figure 11 - Human Development Index (HDI) (HDR, 2011)......................................................... 18 Figure 12 – Urban/Rural population, 1951-2011 (World Bank, 2014) ........................................... 19 Figure 13 -Average IMR between rural and urban areas, 1995, 2005 and 2013 (author) ................ 21 Figure 14 - Under five and infant mortality indicators, 2005 (Government of India, 2006) ........... 22 Figure 15 - World Development Indicators (World Bank, 2014) ................................................... 22 Figure 16 - Agriculture, Industry and Services in India, 2000-2013 (World Bank, 2014)............... 23 Figure 17 - Literacy rate, gender, 2001-2006 (World Bank, 2014)................................................. 25 Figure 18 - Level of S&T, 2004-2005 (Bhattacharya and Graham, 2008) ...................................... 26 Figure 19 - Household ownership of selected goods and services, 2004-2005................................ 27 Figure 20 - Universal acces vs. Universal service (Barrett and Slavova, 2011) .............................. 30 Figure 21 - Access to services, appliances and infrastructure (Barrett and Slavova, 2011) ............. 31 Figure 22 - Tele-density (rural/urban) 1999-2006 (Bhattacharya and Vickery, 2008)..................... 33 Figure 23 – Rural/urban teledensity (Subramanian and Arivanandan, 2009).................................. 33 Figure 24 - Status of telecom indicators, 2005 (Bhattacharya and Vickery, 2008).......................... 33 Figure 25 - Internet world's content (Techinasia, 2012) ................................................................. 35 Figure 26 - Livelihood assets (Tripathi, Singh and Kumar, 2012).................................................. 37 Figure 27 - From push to pull strategies (ICTlogy, 2008) .............................................................. 42 Figure 28 - The commercial infrastructure at the BOP (Ruohonen and al (eds.), 2012).................. 53 Figure 29 - The World Economic Pyramid (Prahalad and Hart, 2002) ........................................... 54 Figure 30 - Research Propositions (Tarafdar and Singh, 2011, p. 5)............................................... 55 Figure 31 - Telecentre/ICT-enabled kiosks network model (Liyanage, 2009, p. 147)..................... 57 Figure 32 – Telecentre as outreach window (adapted from Liyanage, 2009, p. 147) ...................... 60 Figure 33 - Agriculture and employment in India (WorldBank, 2014) ........................................... 61 Figure 34 - Agricultural extension as part of AKIS/RD (Unwin, 2009, p. 50)................................ 62 Figure 35 - Evolution of information sources to farmers (Mittal, 2012, p. 15)................................ 63 Figure 36 - Economic characteristics of sample states (Kendall and Singh, 2006, p. 9).................. 71 Figure 37 - SWOT Analysis template (Team FME, 2009, p. 6) ..................................................... 73 Figure 38 - The mandi system (OpenIDEO, 2012) ........................................................................ 76 Figure 39 - The e-Choupal system (OpenIDEO, 2012).................................................................. 76
- 8. Figure 40 -ITC e-Choupal timeline (Prahalad and Krishnan, 2011, p. 2)....................................... 76 Figure 41 - Profit of farmers and e-Choupal (Admane, 2014, p. 255)............................................. 79 Figure 42 - e-Choupal 2.0 value chain (Seas of Change, 2012, p. 2) .............................................. 80 Figure 43 – e-Choupal 3.0 Business Model (Prahalad and Krishnan, 2011, p. 9) ........................... 81 Figure 44 - e-Choupal Supply Chain (Prahalad and Krishnan, 2011, p. 4) ..................................... 84 Figure 45 - Research Study 1: Comparison of transaction time (Admane, 2014, p. 255) ................ 85 Figure 46 - Research Study 1: Satisfaction with e-Choupal (Admane, 2014, p. 255)...................... 87 Figure 47 - Employment exchanges (adapted from Admane, 2014, p. 254) ................................... 88 Figure 48 - VSAT satellite dish for connectivity (Toyama and al, 2004, p. 7)................................ 91 Figure 49 - SWOT Analysis of ITC e-Choupal (Author, 2014)...................................................... 95 Figure 50 - n-Logue's business model (Jhunjhunwala and al, 2004, p. 33) ................................... 100 Figure 51 - Figure 51 - Operating model of n-Logue (Paul, 2004, p. 8)........................................ 100 Figure 52 - corDECT design (Paul, 2004, p. 7)............................................................................ 101 Figure 53 - the top services of all n-Logue kiosks, 2004 (Paul, 2004, p. 24) ................................ 103 Figure 54 - Kiosk services frequency (Kendall and Singh, 2006, p. 10)....................................... 103 Figure 55 - Highest revenue generating services by State (Kendall and Singh, 2006, p. 27)......... 104 Figure 56 – corDECT vs. Traditional technologies (Howard, Simms and Simanis, 2001, p. 7) .... 106 Figure 57 - n-Logue wireless access tower (Tirumvallur) (Toyama and al, 2004, p. 7) ................ 107 Figure 58 - N-Logue kiosk near Pabal, Maharashtra (Toyama and al, 2004, p. 2) ........................ 108 Figure 59 - Remote eye-care consultation (Jhunjhunwala and al, 2004, p. 36) ............................. 110 Figure 60 – Remote configuration (Dakshinamoorthy and Gordon, 2007, p. 7) ........................... 110 Figure 61 - n-Logue telemedicine model (Dakshinamoorthy and Gordon, 2007, p. 6).................. 110 Figure 62 - Age distribution of kiosk users (Kumar and Best, 2006, p. 6) .................................... 115 Figure 63 - Distribution of religions of kiosk users (Kumar and Best, 2006, p. 7)........................ 115 Figure 64 - SWOT Analysis of n-Logue (Author, 2014).............................................................. 118 Figure 65 - Impact assessment (Drishtee, 2014) .......................................................................... 129 Figure 66 - Factors contributing to telecentre sustainability (Liyanage, 2009, p. 53).................... 144 Figure 67 - Mapping the reasons for non-sustainability (Liyanage, 2009, p. 26) .......................... 144
- 9. 1 1. Introduction Information andcommunication technologies (ICTs) are commonly used nowadays to stress the role of unified and integrated technical means that provide users with information they can access to, share and store according to their preferences and needs. As ICTs provide a large spectrum of tools that have been widely acknowledged as important resources for the socio-economic development of developing countries all over the globe, it can be more specific to consider the impact ICT can have on rural development of developing countries. The case of India is paticularly appropriate since it allows us to closely analyse the relationships between ICT and the different socio-economic and socio-cultural aspects, especially due to the existing divides in India - urban-rural divide, caste divide, gender divide, state divide, etc. - which in turn, have a direct effect on the digital divide. Supported by ICT policies from the Indian Government and from States of India as well, ICT- enabed kiosks emerged in the late 1990’s and early 2000’s as an ICT for development (ICT4D) mainstream and enabler for bridging the digital divide in the rural areas. These kiosks were either operated by the public sector (through e-governance initiatives) or they resulted from private sector initiatives, sometimes in partnership with the public sector as well (public-private partnerships). Driven by the private sector, the private (either franchise- or corrporate-led) and for-profit model of ICT-enabled kiosks has been massively implemented and scaled through rural India during the 2000’s. Even with the fast expansion of mobile telephony and related applications in today’s rural India, I find valuable to ask the following question in order to analyse the progess, shortcomings and other critical issues encountered through the franchise and for-profit model of ICT-enabled kiosks: “Can ICT drive development in rural India through the private and for-profit model of ICT-enabled kiosks?”
- 10. 2 1.1 Points ofinterest In this work, the impact of ICT4D on rural India is explored, with a special focus on the franchise and for-profit model in rural India. Why? I asked myself whether it was possible to succeed in launching profitable ICT-enabled kiosks for the Bottom of the Pyramid (BOP) in rural India in order to consequently bridge the existing digital divide between urban and rural areas (urban-rural divide) and propel socio-economic development in spite of the significant lack of infrastructure and efficient institutions. In addition, I will delineate the effectiveness of information and communication services through the ICTs ability to answer the needs of rural Indian communities in the areas of agriculture, education, health, e-governance, banking and utility services. Moreover, the role and the evolution over time of the ICT policy in India provide feedbacks on the importance institutions play for ICT4D in India. However, it is absolutely necessary to keep a holistic approach in order to understand the underlying factors which could influence the impact of ICT4D in rural India. Therefore, it is of upmost importance to consider the socio-cultural and economic divides existing in India, particularly the urban-rural divide, which in turn can engender digital divide throughout the country. As my main focus remains on ICT4D in rural India, I study three cases, ITC e-Choupal, n-Logue and Drishtee, which permit me to illustrate by their own context of implementation and business model, the way they operated ICT-enabled kiosks and the success or failure they encountered in accordance to the strategy followed. A discussion platform takes place where I gather my main observations regarding the achievements and the critical issues of the private and for-profit model in bridging digital divide and driving development. Examples based on the case studies illustrate and complement the discussion platform. The last point of interest consists in making further considerations, so that I can take into account in that section how the franchise and for-profit model is currently functioning and the various paths followed by ICT in order to drive development in rural India.
- 11. 3 1.2 Methodology In thevery beginning, I contextualize ICT in rural India: valuable statistics are gathered in order to better contextualize the urban-rural divide. Using a framework (awareness, availability, accessibility, affordability), the idea is to first identify the resulting digital divide to better understand how the digital divide is engendered in this country. For this purpose, I use the 4C’s framework in order to assess how ICT can effectively outline the shift levers available for bridging digital divide. The ICT-D and ICT4D discourses are then juxtaposed, ensuing in the description of the private and for-profit models of ICT-enabled kiosks in the following section. As previously mentioned, I practically make use of three case studies on the franchise and for-profit model for development in rural India. The first project, ITC e-Choupal, is still currently operating, with a focus in the middle of India. The second project, n-Logue, is no longer operational and focused on the South and West of India. And finally, the third project, Drishtee, is still operational today but strategically changed, with a focus on the North and the East regions. Throughout the three case studies I explore, I use a same framework, the SWOT business analysis technique, in order to compare and contrast their capacity for sustainable development. Finally, based on a secondary and primary data research, I conclude by mitigating the success rate of ICT-enabled kiosks in driving rural India forward depending on the challenges encountered, which are explained one by one in a discussion platform. The primary research was done through interviews (face-to-face, skype and e-mail); this allowed me to pose questions and obtain valuable feedback on observations resulting from the analysis of secondary sources.
- 12. 4 1.3 Limitations In thiswork, I decide to focus on the franchise and profit model of ICT-enabled kiosks. Therefore, I excluded from my research e-governance initiatives or other ICT initiatives such as ICT public- private partnerships. Moreover, I specifically studied the socio-economic impact ICT-enabled kiosks may have on rural development and empowerment by taking into account the resulting digital divide from the urban-rural dichotomy of India. No primary research study on the ground has been conducted due to time and location reasons. Furthermore, an important limitation in this work related to the literature review I have been able to gather, is the time interval of analysis related to the early phase of the telecenters’ movement from 2000 to 2010. Therefore, even though the critical issues I raise in the end of this work are relevant to the private and for-profit models of the ICT- enabled kiosks, technology is constantly evolving and certain issues regarding cost of technology, connectivity and content can be more easily overcome nowadays. Finally, it is important to underline once more that I have limited my research to the ICT-enabled kiosks in accordance to my primary and secondary research data, as well as my own perspective; this seems to remain the best approach to address low-socioeconomic, large, underserved or even communities that are yet to obtain the services being made available through e-government to e-education in one shared-access facilities. Providing “many” with “few” remains necessary in rural India. It is part of what the Indian call Jugaad (frugal innovation).
- 13. 5 2. Literature Review Informationand communication technologies (ICTs) are commonly defined over the globe as electronic, digital or technical means that provide users with information they can access, share and store according to their preferences and needs (UNDP, 2001; Michiels and Van Crowder, 2001; Chapman and Slaymaker, 2002; Heeks, 2002; Kramer, Jenkins and Katz, 2007; FOLDOC, 2008; Unwin, 2009; ITU, 2012; TechTarget, 2014). Statistics can be used in order to measure the information society looks like pertinent in order to situate the level of advancement of a country; in other words, effectively determining whether it is developed or developing (ITU, 2007; ITU, 2009; United Nations, 2009; ITU, 2013; WEF, 2014; WorldBank, 2014). Kramer, Jenkins and Katz (2007) underlined the role of the ICT sector in expanding economic opportunity. ICT is built on the basis of 4 dimensions which form the 4C’s framework (Bracey and Culver, 2005; Tongia, 2006; Makitla and al, 2010): computing, communication, content and capacity. Kling (1999) argues that Internet use is not only related to technological access (computing, communication and content), but also related to social skills (human capacity). Heeks mentions that the economic, social and political life of the 21st century will be mostly dominated by the digital world and will subsequently exclude people without ICT access (Heeks, 2008, p. 26, cited by Makitla and al, 2010). The situation of India is depicted by most of the authors and organizations of the literature review who work on the topic of ICT in rural India. Most of them underline the important economic growth in the country for over two decades with its export-oriented software and ICT-based services sector. Nonetheless, they remark the fact that India still stands far behind on the human development index (Census of India, 2001; Baskaran and Muchie, 2006; HDR, 2008; Subramanian and Arivanandan, 2009; Walsham, 2010; Census of India, 2011; Sreekumar, 2011; Mukerji, 2013; HDR, 2014; UNDP, 2014; WorldBank, 2014). It is essentially the socio-economic nature of the significant differences between urban and rural areas in India (urban-rural divide) that raises interest for understanding the impact ICT could bring in rural India through the private and for-profit models; in concrete terms, this would provide underprivileged populations with access to information and drive development of their own communities.
- 14. 6 The Oxford dictionary(Oxford University Press 1989) define the word ‘urban’ as “relating to a city or town” and the word ‘rural’ as “relating to the countryside rather than the town”. In the “United Nations (UN) World Urbanization Prospects (WUP), The 2014 revision” (UN 2014) it is claimed that “national statistical offices are in the best position to establish the most appropriate criteria to characterize urban areas in their respective countries” and ‘rural population’ is associated to the “difference between the total population and the urban population” and “refers to people living in rural areas”. Based on the WUP, the World Bank (2014) mentions “urban population […] is calculated using World Bank population estimates and urban ratios from the United Nations World Urbanization Prospects” and “rural population […] is calculated as the difference between total population and urban population.” Viktoria Hnatkovskaa and Amartya Lahiri (2013) described the urban-rural divide by taking into account and studying between 1983 and 2010 four points they considered relevant to understand the differences between urban and rural areas: the education attainments levels, the occupation choices, the wages and the consumption expenditure of Indian workers. Sneh Sangwan and Randhir Singh Sangwan (2003) focused their attention on the fact we live in societies in transition with changing spatial pattern of social variables which can be assessed through the evolution of the rural and urban society in India over time (Census of India 2001; Government of India, 2006; Census of India 2011; Chandramouli, 2011; Government of India, 2013; WorldBank, 2014). Chrisanthi Avgerou (2008) explained how emerging countries have attempted to get benefits from ICT usage. She identified three discourses on IS implementation in developing countries (ISDC): the transfer and diffusion discourse, the socially embeddedness discourse action and the transformative discourse. Tripathi, Singh and Kumar (2012) depicted the impacts of ICT on livelihood assets by categorizing them as human, natural, financial, social and physical assets. The link between ICT growth and economic growth is explored by Maximo Torero, research fellow at IFPRI, and Joachim von Braun, director general of IFPRI, who wrote a brief (2006) in order to understand whether and how ICT could play a role in providing pro-poor services and fostering their development even if many prerequisite must to be put in place. More precisely, Robert Chapman and Tom Slaymaker (2002) investigated the potential role of ICT in rural development by highlighting the constraints and opportunities faced to their application. In We the Peoples: A Un for the Twenty-First Century (2000), the Former United Nations General-Secretary Kofi A. Annan
- 15. 7 argues and confirms:“The information technology sector, in short, can transform many if not most other sectors of economic and social activity” (p. 34). The trend and pattern of growth of the ICT industry in India, such as the e-governance situation and the teledensity variation across various Indian states, is more carefully analyzed by Varma and Sasikumar (2004) who explain that “many studies have confirmed the positive pay offs of IT in enhancing growth and development” (p.22), but that the “major impediment for ICT diffusion [in India] is the lack of sufficient infrastructure” (p.32). Kurukshetra (Vol. 60, January 2012), a journal on rural development, investigates the role of ICT in rural development of India through the contribution of several authors: Gulati, Hazra, Kameswari, Sanyal and Raheem. Chitla (2012) as well as Kumar and Singh (2012) wrote a paper to point out how ICT initiatives are capable of development in rural India. More specifically, Makitla, Herselman, Botha and Van Greunen (2010) published a paper on the mechanisms that facilitate delivery of digital content and services to resource constrained communities through any access-technologies and devices available to the end-users. However, the key of success for ICT4D in rural India is to succeed first in bridging the digital divide (Wade, 2002; Baskaran and Muchie as editors, 2006; TechTarget, 2014), which can be structured into 4 levers (Bracey and Culver 2005; Tongia 2006; Makitla and al, 2010): awareness, availability, access and affordability. Rao (2005) explained the digital divide arising from the use of ICTs that occurs in India by discussing different aspects of Indian infrastructures such as electric networks, IT, internet penetration and teledensity. He enlightened that the urban-rural divide could partially explain the digital divide. However, he also pointed out that some Indian states are more digital than others and there are caste, gender, educated–uneducated and rich–poor divides that could also justify the “national digital divide“. The relationship between the digital divide and the urban-rural divide is also considered by Mathews (2001) who showed in urban areas there is a heavy concentration of ICTs, while in rural areas people cruelly lack access to ICTs which give rise to development issues. More specifically, the internet’s impact on India, the challenges for building a stronger internet ecosystem and the actions required to bridge critical gaps in the Internet ecosystem were discussed in the report written by McKinsey & Company, Inc. (2012). Tongia, Subrahmanian and Arunachalam (2005) also looked at the features of digital divide, the challenges encountered in bridging it and the role ICT can play at answering Millenium Development Goals
- 16. 8 and Targets fromthe Millennium Declaration signed by 189 countries (2000) for providing rural development and bridging digital divide. In that sense, the World Telecommunication/ICT Development Report (2010) from the International Telecommunication Union (ITU) showed how ICT can help achieve MDGs and the report prepared by Gilhooly (2002) for the United Nations ICT Task Force in Support of the Science, Technology & Innovation Task Force of the United Nations Millennium Project complements the literature on sustainable human development and poverty eradication thanks to ICT. The private and for-profit model (Kendall and Singh, 2006; Singh, 2006; Ariyabandu, 2009; World Bank, 2009; Mukerji, 2013) is one of the platforms for ICT-enabled kiosks (also called multipurpose telecentres or more commonly telecentres) in rural India. ICT-enabled kiosks are share-access facilities providing services for low-income and socially disadvantaged communities for strengthening their local development (Fillip and Foote, 2007; Ariyabandu, 2009; Liyanage, 2009; Mukerji; 2008; Mukerji, 2009; Unwin, 2009; Mukerji, 2013). These communities are more commonly called the “Bottom of the Pyramid” (Prahalad and Hart, 2002 ; Kuriyan, Ray and Toyama, 2008; Tarafdar and Singh, 2011) where there are market separations which can be mediate by ICT through three actions: Automate, Informate and Transformate (Tarafdar and Singh, 2011). ICT help in providing number of services which can empower rural areas. The typology of services can be done through two types of categorization: type of operations and type of needs. There are basically three main types of operations ICT can execute (Dossani, Misra and Jhaveri, 2004): informational services, transactional services and e-governance services. The other subcategorization can be done by focusing on the needs ICT fulfils. Here below, several sections dedicate to all of those areas which concern the needs and requirements in rural India with the literature review associated: 1. Agriculture (Meera, Jhamtani and Rao, 2004; Prasad, 2005; Rivera, Qamar and Mwandemere, 2005; Unwin, 2009; Qaisar, Ali khan, Mohd and Alam, 2011; Glendenning and Ficarelli, 2012; Mittal, 2012, Kumar and Sankarakumar, 2012; Admane, 2014); 2. Education (IBM, 2005; Singh, 2006; Devi, Rizwaan and Chander, 2012; Roy, 2012; Von Lautz-Cauzanet, 2012);
- 17. 9 3. Healthcare (Prasad,2004; Bagchi, 2006; Murthy, 2008; Bhaskaranarayana, Satyamurthy, Remilla, Sethuraman and Rayappa, 2009; Tiwari, 2010; Mishra, Singh and Chand, 2012; Ghia, Patil, Ved and Jha, 2013); 4. E-government services (Rao, 2004; Toyama, K., Kiri, K., Ratan, M. L., Nileshwar, A., Vedashree, R., and MacGregor, 2004; Malhotra, Chariar, Das and Ilavarasan, 2007; Mukerji, 2008; Unwin, 2009; Upadhyaya and Chugan, 2012; Kumar and Kumar, 2013); 5. Financial and utility services (Paul, 2004; Toyama and al, 2004; Singh, 2006; Satchidananda and Khanolkar, 2007; Ariyabandu; 2009; Mukerji, 2013;). Findings of the case studies and the following discussion platform attempt to substantiate whether or not the private and for-profit model can effectively drive development in rural India. The SWOT analysis technique (Pahl and Richter, 2009; Team FME, 2013) is used to depict the strengths, weaknesses, opportunities and threats of each of the three cases introduced, described and discussed with help of secondary sources (see below) and primary sources (Baharul Islam, Maitrayee Mukerji, Rajendra Kumar, Jai Asundi, Satyan Mishra and Tim Unwin, all of them interviewed in 2014): 1. ITC e-Choupal (Annamalai and Rao, 2003; Bhatnagar, Dewan, Torres and Kanungo, 2003; Chand, 2006; Singh and Khatri (eds.), 2008; Dangi and Singh, 2010; Walsham, 2010; Prahalad and Krishnan, 2011; The DeSai Group, 2011; Tarafdar and Singh, 2011; Seas of Change, 2012; Admane, 2014; Pant and Negi, 2014); 2. n-Logue (Howard, Simms and Simanis, 2001; Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004; Paul, 2004; Toyama, Kiri, Menon, Pal, Sethi and Srinivasan, 2005; Gurumurthy, Singh and Kasinathan, 2005; Best and Kumar, 2006; Kendall and Singh, 2006; Dakshinamoorthy and Gordon, 2007; Ramachander, 2007; Steyn, 2010; Sreekumar, 2011) 3. Drishtee (Delgado, Eagle, Hasson and Sinha, 2002; Bhatnager, Dewan, Moreno Torres and Kanungo; 2003; Toyama, Kiri, Menon, Pal, Sethi and Srinivasan, 2005; Parminder and Deepika, 2008; Telecom LIVE, 2009; Mukerji, 2013; Drishtee.com, 2014). Microsoft showed findings through a review of research on pc kiosks (2007) based on existing literature review (Heeks, 2003; Keniston 2002; Toyama and al., 2005) and Toyama, Kiri, Menon, Pal, Sethi and Srinivasan made observations based on quantitative results on rural pc kiosks in India by taking into consideration n-Logue and Drishtee (2005). Sey and Fellows (2009) more especially depicted the literature review on the impact of public access to ICT based on four types of
- 18. 10 indicators (venue performanceand sustainability, users, usage patterns and downstream impacts) even though they concluded to limited and elusive evidence on downstream impacts of ICT on development. Furthermore, Masiero (2011) discussed the relationship between the two underlying dimensions of ICT-enabled kiosks: social and financial. Kuriyan, Ray and Toyama (2008) enlightened the importance of private-public partnerships in order to address the “Bottom of the Pyramid” by taking into account social and commercial goals at the same time. Certainly, it is good to raise issues and challenges, but it is better to propose possible solutions. Several authors and organizations made recommendations (Harris, Kumar and Balaji, 2003; Badshah, Khan and Garrido, 2005; Garai and Shadrach, 2006; Kendall and Singh, 2006; Singh, 2006; Tongia and Subrahmanian, 2006; Fillip and Foote, 2007; Ariyabandu, 2009; Liyanage, 2009; Singh (editor), 2009; Unwin, 2009; Sreekumar, 2011; WBCSD, 2012; Mukerji, 2013).
- 19. 11 3. ICT inIndia 3.1 Introduction to Information and Communication Technology (ICT) ICT is the means, either as softwarei or hardwareii technology, for “creating, storing, processing, disseminating and exchanging information” (Heeks, 2002; UNDP, 2001, cited by Mukerji, 2013). The online TechTarget defines the different types of technologies ICT concerns, claiming that it “[…] is an umbrella term that includes any communication device or application, encompassing: radio, television, cellular phones, computer and network hardware and software, satellite systems and so on, as well as the various services and applications associated with them, such as videoconferencing and distance learning”. Tim Unwin (2009, p. 77) also adds, by citing Weigel and Walburger (2004, p. 19), ICT is a used terminology to refer “to technologies to access, process and transmit information […]”. These technologies can be separated into areas which are telephony, broadcast media, and audio-visual processing and transmission systems (FOLDOC, 2008). Michiels and Van Crowder (2001) defined ICTs “as a range of electronic technologies which when converged in new configurations are flexible, adaptable, enabling and capable of transforming organizations and redefining social relations”. They also mentioned the existing “convergence between the new technologies and conventional media” (Michiels and Van Crowder, 2001, p. 8) so that the new digital technologies can share and exchange information on different devices and multiple media (cited by Chapman and Slaymaker, 2002, p. 1) thanks to the emergence of the World Wide Web and the development and democratization of the digital technologies (Labelle, 2003, p. 1). With the emergence of the internet and the related digitization of information towards the later part of the 1980’s, the term ICT was first used by academics and researchers, increasing in popularity with applications by modifying and mediating the relationship between men and machines. The ICT revolution was launched, where Consumers-to-Consumers (C2C), Business-to-Consumers (B2C), Government-to-Business (G2B), Business-to-Government (B2G), Business-to-Partners (B2P), Partners-to-Business (P2B), Business-to-Enterprise (B2E), Government-to-Citizen (G2C) and Citizen-to-Government (C2G) relationships are therefore facilitated (Baffour Kojo and Lu, 2003;
- 20. 12 Malhotra, Chariar, Dasand Ilavarasan, 2007; Mukerji, 2008; Schware, 2009; Chitla, 2012; McKinsey & Company, Inc., 2012). Nowadays, ICTs are pervasive by nature and resulting applications emerge in different organizations and processes progressively “leading to reduction of processing time, lower transaction costs, lower inventory costs and less material” (Mody and Dahlman, 1992, cited by Maitrayee Mukerji, 2013). It has become a pillar of the modern knowledge society as ICT connects people together and provides e-services relying on improving the information transfer (Kramer, Jenkins and Katz, 2007). Furthermore, ICT can also been considered in terms of opportunities to ‘leapfrog’ technology emerging and poor countries left behind use, in order to drive development and ‘catch-up’ the developed countries (Mukerji, 2013). In this particular case, the term ‘ICT for Development’ (ICT4D) is more appropriately used. In that sense, many initiatives, notably the Global Knowledge Initiative (founded in 1997), the UN ICT Task Force (established in 2000), the DOT-Force (launched in 2000) and the World Summit on the Information Society (hosted by the International Telecommunication Union in 2003 and 2005), have actively built “[…] partnerships between civil society, the public and the private sectors to harness ICTs for development” (Chapman, Slaymaker and Young, 2003, cited by Grimshaw and Kala (eds.), 2011, p. 2). 3.2 The 4C’s framework ICTs can be studied and evaluated on the basis of a 4C’s framework (Bracey and Culver, 2005; Tongia, Subrahmanian and Arunachalam, 2005): 1. Computing: Computers are expensive to acquire; this implies that shared access like cybercafes or ICT-enabled kiosks, and mobile technology such mobile phones can be good financial alternatives, especially in developing and emerging countries. 2. Connectivity: The mobile telephony and internet are increasingly used and available everywhere over the globe, even if network coverage is, for the most part, limited to urban areas and the data connectivity remains poor and expensive. 3. Content: Content does not exist in every language and information systems that provide exhaustive content require multimedia which require broadband connectivity.
- 21. 13 4. Capacity: Capacityrefers to the ability for people to understand, use and maintain ICTs. According to Kling (1999), they are user skills, in other words, skills that are related to “professional knowledge, economic resources and technical use”. Governments play here an important role by promoting ICT to people: children can already be educated to use them at school. Hardware or computing is becoming increasingly affordable and its price-performance ratio is also quickly improving. Nonetheless, other aspects such as communication access and software use prevent ICTs from becoming more cost effective and readily available to all populations. ICTs can be a driver of performance and development as they facilitate the information access that provides knowledge to users. For these reasons, investments in ICTs must absolutely be considered for emerging and developing countries in order to build a Knowledge Economy, as it is obviously the case in India for more than a decade now (Rao, 2005, p. 366). The economic, social and political life in the 21st century will be mostly dominated by the digital world and will subsequently exclude people without ICT access according to Heeks (2008, p. 26). Hence, Heeks (2008) and Unwin (2009); these authors express the need to invest in ICTs by taking into account and innovating in each aspect of the above-mentioned 4C’s framework, in order to deliver ICT access widely and without exception. 3.3 Measuring ICT ICT needs to be measured, in order to evaluate the situation of a community or a region regarding their access to ICT and compare it with others. However, there are far too much data about ICT and it is very difficult but necessary to find standardized data in order to make comparisons on same scale. ICT-related and weighted sub-metrics are often used for measuring ICT, but very often they are not applicable due to lack of data. Several initiatives can be referenced for measuring ICT as follows (United Nations, 2009; ITU, 2014).
- 22. 14 1. The WorldEconomic Forum’s Networked Readiness Index1 (NRI): The NRI measures, on a scale from 1 (worst) to 7 (best), the performance of 148 economies in leveraging information and communications technologies to boost competitiveness and well-being (WEF, 2014; GITRiii , 2014) 2. The ITU Digital Opportunity Index: The ITU-DOIiv is an e-index based on internationally- agreed ICT indicators. This makes it a valuable tool for benchmarking the most important indicators for measuring the Information Society. The Digital Opportunity Index (DOI) is based on 11 ICT indicators, grouped in 3 clusters: opportunity, infrastructure and utilization. 3. The ITU’s 2007 ICT Opportunity Index: The ICT-OI is an inclusive index and provides measurement across 183 economies, relies on ten indicators that help measure ICT networks, education and skills, uptake and intensity of the use of ICT (Figure 1). For analytical purposes, economies are grouped into four categories, ranging from high to low ICT Opportunities. Apart from cross-country comparisons, the index’s methodology highlights relative movements between 2001-2005. A comparison of annual average growth rates shows which countries are making progress and how fast. (ITU, 2007) 1 India is ranked 83 d in 2014. Figure 1 - Networked Readiness Index (WEF, 2014) Figure 2 - ICT Opportunity Index (ITU, 2007)
- 23. 15 4. The ICTPrice Basket (IPB): The IPB combines fixed, mobile and broadband tariffs for 2008 into one measure and compares it across countries. (ITU, 2009) 5. The ICT Development Index (IDI) – formerly the ITU-OI: The IDI captures the level of advancement of ICTs in more than 150 countries worldwide and compares progress made between 2002 and 2007. It also measures the global digital divide and examines how it has developed in recent years (ITU, 2009). I chose to focus a little more on the last Index, the ICT Development Index (IDI), and decompose it in the case of India, for comparison with the rest of the world. You can find all the results from ITU (2009) in the appendix of this work. The International Telecommunication Union (ITU) introduced the ICT Development Index (IDI) “[…] as an indicator of countries’ level of ICT development”, more especially to “measure the digital divide between countries and assess countries’ ICT Figure 3 - 2007 ICT Opportunity Index: sub-indices and indicators (ITU, 2007) Figure 4 - IDI and ICT Price Basket comparison (ITU, 2009) Figure 5 - Top ten economies - broadband Internet sub-basket (2008) (ITU, 2009)
- 24. 16 development potential” (ITU,2009; Barrett and Slavova, 2011, p. 18). The IDI considers several indicators to measure the access to ICT and establish the index: 1. ICT readiness; 2. fixed telephony; 3. mobile telephony; 4. international Internet bandwidth; 5. households with computers; 6. households with Internet. Developing countries have considerably improved the value of their index this last decade compared the developed countries, largely owing to the huge success of mobile telecommunications in developing countries (ITU, 2009; Barrett and Slavova, 2011, p. 18). India did not really enhance its situation regarding the ICT Development Index (IDI): 118th in 2007, while in 2002, it was just one rank less. As we can see in the appendix, India has however improved on the access sub-index (especially resulted from the significant mobile cellular penetration from 1 to 20 per cent). Nevertheless, the country still encountered issues to improve the bandwidth per Internet user, certainly due to the continued growth of the Indian population which may in some ways mitigate the connectivity networks improvements. Similarly, there are low home computer and Internet penetration rates. Finally, India has been better on all sub-indicators regarding the skills sub-index (ITU, 2009, p. 28). Figure 9 - IDI sub-indices by level of development (2002-2007) (ITU, 2007) Figure 8 - Evolution of the digital divide between IDI groups, 2002- 2007 (ITU, 2007) Figure 7 - Three stages in the evolution towards an information society (ITU, 2009) Figure 6 - ICT Development Index - Weighting of indicators (ITU, 2009)
- 25. 17 Year 2000 20032006 2009 2012 GNI per capita, PPP (current international $) 2'040.0 2'420.0 3'260.0 4'100.0 5'080.0 Population, total 1'042'261'758.0 1'093'786'762.0 1'143'289'350.0 1'190'138'069.0 1'236'686'732.0 GDP (current US$) 476'609'148'165.2 618'356'467'437.0 949'116'769'619.6 1'365'372'433'341.3 1'858'744'737'180.5 GDP growth (annual %) 3.8 7.9 9.3 8.5 4.7 Life expectancy at birth, total (years) 62.2 63.3 64.5 65.4 66.2 Agriculture, value added (% of GDP) 23.0 20.7 18.3 17.7 17.5 Industry, value added (% of GDP) 26.0 26.0 28.8 27.8 26.2 Services, etc., value added (% of GDP) 51.0 53.2 52.9 54.5 56.3 3.4 Context of India Before introducing ICT in India, it is first important and relevant to take into the political, the socio- economic, the socio-cultural and the demographic context of India account, more especially the features that play an important role in the way ICT can be used, accessed and afforded. In that sense, I dedicate the following subsections to the discussion of the significant rural-urban divide of India and about its caste, gender and state divides as well. The ICT situation and the resulting digital divide in India are then investigated. Finally, we examine the evolution over time of the ICT policy in India. 3.4.1 The country: some statistics India is the second most populous country in the world with over 1.267 billion people in 2014. About 45% of the population is less than 24 years old; the median age is 27 years old in 2014.2 The Indian economy is the world’s tenth-largest by nominal GDP with 1,877 trillion US$v in 2013 and the world’s third-largest by PPP (Purchasing Power Parity) with 6,777 trillion US$vi in 2013. However, the GDP per capita was only 1,499 US$vii in 2013, so that the income level is considered by the World Bank as lower-middle. The country is divided into 29 States3 and 7 Union Territories. The population is multicultural, multi-religious (mainly Hinduism at 80.5% and Islam at 13.4%)4 and multilingual (18 languages officially recognized by the Government and 844 dialects)5 . 2 http://www.indexmundi.com/india/demographics_profile.html 3 Andhra Pradesh was divided into two states, Telangana and a residual Andhra Pradesh on 2 June 2014 4 http://censusindia.gov.in/%28S%28dcgcku55jsqwk5aayrhold45%29%29/Census_And_You/religion.aspx Figure 10 - Some statistics about India, 2000-2012 (World Bank, 2014)
- 26. 18 India encounters importanteconomic growth since now more than two decades (over 8% per year in the period 2004-2007)6 with its export-oriented software and ICT-based services sector. However, even though India is today the world’s fourth largest economy in purchasing power parity terms (PPP)v , India was ranked as 128th out of 177 countries on the human development index, which is a composite index based on life expectancy, literacy and education levels, and economic standard of living, in 2005 (HDR, 2007) and 135th out of 187 countries in 2013 (UNDP, 2014). Human Development Index (HDI)viii : “Shocking statistics include the percentage of malnourished children under 5 being 46%, the adult female literacy rate as only 48%, and the percentage of the rural population using adequate sanitary services as 18%” (World Bank, 2007, UNICEF, 2004, cited by Walsham, 2010, pp. 1-2). Inequalities are particularly divided between urban and rural areas, the urban-rural divide, which will be discussed in the following section. 1980 1990 2000 2005 2008 2010 2011 2012 2013 1980-1990 1990-2000 2000-2013 HDI rank Country 135 India 0.369 0.431 0.483 0.527 0.554 0.570 0.581 0.583 0.586 1.58 1.15 1.49 Human Development Index (HDI) Average annual HDI growth Value (%) Medium human development Figure 11 - Human Development Index (HDI) (HDR, 2011) India's telecom network has huge potential of development because of its high population (also in terms of economies of scale for low-cost telecommunications) and the focus on ICT (institutional focus on that by all types of agencies in India; the government, the state, the private sector, the Civil Citizen Organizations, etc.). The economic success of India does, however, not benefit everybody in India. As we above mentioned, there are inequalities related to socio-economic situation, especially between urban and rural areas, but is just one of the numerous kind of inequalities: gender, castes, education, state, etc. In that sense, plenty of ICT-enabled initiatives have been implemented throughout the country since the 2000’s, in order to empower the poorest communities of the country. 5 Fillip and Foot, 2007, p. 171 6 World Bank, 2007
- 27. 19 3.4.2 Urban-rural divide TheOxford dictionary (Oxford University Press, 1989) defined the word ‘urban’ as “relating to a city or town” and ‘rural’ as “relating to the countryside rather than the town”. Overall, about 30% of the Indian population lives in urban areas and 70% in rural areas (Census of India, 2011; WorldBank, 2014). The majority of the population then lives in rural areas, where the poverty level is higher and the literacy rate lower; literacy rate stands at 67% in rural areas compared to 84% in urban areas (Census of India, 2011) and where agriculture is a way of life (India is the second world's largest agricultural producer and employs about half of the active workers of the country) even though it counts not more than 20% of total GDP (WorldBank, 2014). Figure 12 – Urban/Rural population, 1951-2011 (World Bank, 2014) Most of the time, it is commonly accepted that urban people generally work in the manufacturing and services industry and rural people work in agriculture (India being the second largest agricultural producer in the world in 2014).78 It is stated by United Nations that “national statistical offices are in the best position to establish the most appropriate criteria to characterize urban areas in their respective countries” (cited by Ledent, 2001, p. 106). Considering India, the definition of urban area is the following one (Census of India, 2011, p. 12): 7 http://www.theindiaeconomyreview.org/Article.aspx?aid=26&mid=3 8 http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html
- 28. 20 (a) All statutoryplaces with a municipality, corporation, cantonment board or notified town area committee, etc. (known as Statutory Town) (b) All other places which satisfy the following criteria (known as Census Town) : a minimum population of 5,000 ; at least 75 per cent of the male main workers engaged in non-agricultural pursuits ; and a density of population of at least 400 per sq. km. (1,000 per sq. mile). Therefore, all areas which are not categorized as Urban Area are considered as Rural Area. (Census of India, 2011, p. 13) In the working paper The Rural-Urban divide in India (Hnatkovskaa and Lahiri, 2013), the authors describe the urban-rural divide by taking into four points account and studying them between 1983 and 2010 to understand the differences between urban and rural areas: the education attainments levels, the occupation choices, the wages and the consumption expenditure of Indian workers. According to Sneh Sangwan and Randhir Singh Sangwan (2003, p. 19), “rural-urban differences get revealed in occupation, environment, size of community, density of population, heterogeneity, social differentiation, mobility and system of social interaction”. They also focused their attention on the fact we live in societies in transition, so that even in India “rural-urban differences are essentially a function of the differential rates of change occurring in towns and villages”: changing spatial pattern of social variables. However, the report of the World Urbanization Prospects, the 2014 Revision (United Nations, 2014, p. 4), states that “the urban definition employed by national statistical offices varies widely across countries, and in some cases has changed over time within a country”. On the same page of this report (Ibid.), it is more precisely explained what criteria can be used in order to define the concept of urban area: The criteria for classifying an area as urban may be based on one or a combination of characteristics, such as: a minimum population threshold; population density; proportion employed in non-agricultural sectors; the presence of infrastructure such as paved roads, electricity, piped water or sewers; and the presence of education or health services. Even though there are global efforts to produce uniform criteria based on satellite imagery for instance, it is very difficult to make comparisons due to the heterogeneity of the urban definition
- 29. 21 across countries ofthe world. China and India are two good examples that fully illustrate that kind of problem: rural settlements do not feature any of the typical characteristics of urban areas, but have large numbers of inhabitants, that is often more than 5,000 people (WUP, 2004). The term ‘rural’ is widely used because there is not really a shared definition. It is more related to remote areas where there are only spare house holdings in villages. Distinction between ‘rural’ and ‘urban’, however, remains arbitrary related to the evolution of socio-economic flows over time. Migration (from rural to urban areas) and rural development (by enhanced quality of life) modify what is categorized as ‘rural’ over time. Education, healthcare and lifeways constitute the main flows of the evolution that can occur. Megan Reed, research coordinator at the Center for the Advanced Study of India (University of Pennsylvania) depicted the existing urban-rural divide in India as follows: “On the one hand sit urban metropolises like Mumbai and Bangalore, whose cosmopolitan citizens rail against corrupt politicians, fetishise growth and care little for parochial concerns, like caste. On the other hand sits India’s vast rural hinterlands, where caste dictates social relations and corruption takes a backseat to basic sustenance.”9 In rural India, several features can be gathered to depict the situation: the level of education is low (literacy rates were around 60 percent according to Census 201110 ) and there are still serious problems of nutrition, healthcare and sanitation (infant mortality rate remains high in rural India, even though it went down the last two decades; see figures 11 and 12). See below, on figure 10, the evolution of the average IMR over time from 1995 to 2013 between rural and urban areas. Year 199511 20059 201312 India Rural Urban Rural Urban Rural Urban Average IMR 80 48 64 40 44 27 Figure 13 -Average IMR between rural and urban areas, 1995, 2005 and 2013 (author) 9 http://blogs.ft.com/beyond-brics/2014/04/03/india-elections-the-ruralurban-divide-dies-out/ 10 Census of India, 2001. 11 Government of India, Mortality Statistics in India, p. 67 12 Government of India, Sample Registration System. Registrar General, India. Volume 49, no. 1, September 2014, p. 1
- 30. 22 Figure 14 -Under five and infant mortality indicators, 2005 (Government of India, 2006) Variable 2000 2005 2010 Rural poverty headcount ratio at national poverty lines (% of rural population) 41.8 33.8 Rural poverty gap at national poverty lines (%) 9.2 6.8 Rural population growth (annual %) 1.4 1.0 0.8 Rural population (% of total population) 72.3 70.8 69.1 Improved water source, rural (% of rural population with access) 76.1 82.2 88.3 Improved sanitation facilities, rural (% of rural population with access) 14.4 18.7 23.0 Access to electricity, rural (% of population) 48.1 66.9 Figure 15 - World Development Indicators (World Bank, 2014) Rural India essentially depends on agricultural sector, whose growth national rate is around 2-3 percent compared to tertiary sector which is growing at higher rates around 10 percent. However, the cost of agriculture increases and there is generally poor land management for different reasons (partly due to agrochemical use; with Monsanto for instance). Many farmers consequently commit suicide and since the growth in rural India is far less high than in urban India, several millions people emigrate for employment opportunities and better life, but as they have low skills they get very low wages and live in bad conditions13 . 13 http://www.drishtee.com/
- 31. 23 There results fromthat fact a migration from rural to urban for searching employment opportunities and better life conditions (Prasad, 2007, pp. 117-118). Rural to urban migration is particularly a phenomenon that mainly concerns the poor and backward States of India where there is large population mobility (Mitra and Murayama, 2008). They show that the intrastate migration is more important than the interstate migration as socio-cultural aspects differ between States very much. Interestingly, they operate a decomposition of what constitute urban growth: natural increase; population of new towns or less declassified towns; increase due to expansion in urban areas and merging of towns; and net migration (Kundu, 2006). 3.4.3 Other divides: castes, gender and states In rural India, women are conveniently processed but suffer from all sorts of rules that exclude them from social life. Thus, they are designed to work indoors and are totally dependent on men. CASTES The caste system is a stratification of the Indian society based on two concepts: varnaix (symbolizing social rank) and jatix (symbolizing castes and sub-castes). These two concepts are Figure 16 - Agriculture, Industry and Services in India, 2000-2013 (World Bank, 2014)
- 32. 24 related in thesense each Indian is born with a social rank arising from its caste (Singh, 2005; Singh, 2008; Ahmad, 2010). It is the British Empire that decided to segregate Indians as a means of social control, in order to allocate the population to administrative roles or subordinated roles. The caste system has been divided and hierarchized into five classes (included the out of class ‘untouchables’). By order of social rank, there are Brahmins (the priest and academics), Kshatriyas (the warriors and kings), Vaishyas (merchants, landowners, farmers and artisans), Shudras (servants and subordinated to the upper classes) and Harijan14 (untouchables and subordinated to all the upper classes). By the past, untouchables were considered as impure, so that they were excluded from the society. After the independence of the country in 1947, Mahatma Gandhi enforced the movement for social inclusion of the untouchables. Therefore, a positive caste-based discrimination of jobs and other initiatives for the backward classes of India (Scheduled Castes, Scheduled Tribes and Other Backward Castes) have been over time formalized by the central government and state governments. All these public interventions were and still are necessary to protect and improve the socioeconomic conditions of the lower and backward castes of the Indian Society, because the caste system still exists today in India (Singh, 2005; Ahmad, 2010). Negative caste-based discrimination continues as well, even though social position and wealth are less associated with caste thanks to the public policies put in place. Especially the caste system is still very present and traditionally respected in rural India compared to urban areas where for instance inter-caste marriages are more and more frequently and socially accepted. (Sekhon, 2000; Ahmad, 2010) As it is discussed later in this work, ICTs have been envisioned as tools to empower the marginalized communities and strengthen their livelihoods. Taking the socio-cultural aspect of the caste system in India into account, especially very present in rural India, the critical and related issues encountered with the private and for-profit model of ICT-enabled kiosks will be also slightly pointed out and discussed. GENDER DIVIDE The access to knowledge and education for females in India has been historically very restricted till the middle of the 18th century when the British Empire colonized India. The reason behind was that India was ruled by Muslim dynasties with low consideration for the female status. Under the British 14 Title given by Mahatma Gandhi who envisioned an Indian society inclusive
- 33. 25 Empire, women’s rightsget better and particularly in 1947, when India became independent, the education system opens up to the girls, as the government took the decision to provide education to all Indian females (Kumar and Sangeeta, 2013). Therefore, it impacted on their gender literacy rate, which was at that time consequently much lower than the male literacy rate in India. Here below you can see the evolution of the gender literacy rates last century; the female literacy rate being still far lower than the male literacy rate: Year 2001 2006 Literacy rate, adult female (% of females ages 15 and above) 47.8 50.8 Literacy rate, adult male (% of males ages 15 and above) 73.4 75.2 Figure 17 - Literacy rate, gender, 2001-2006 (World Bank, 2014) Resulting from this starting situation, it is therefore more difficult for women to apply for a job (because of persistent gender discrimination, which still even exists nowadays in developed countries) and there are less women at top positions as they are quantitatively less to be literate in India compared to men. Nevertheless, in cities, more and more women start to take good positions and they are more women reaching higher education. These positive signals do not however bode well: rural India is always very traditional as it remained cut off the outside world because of lack of infrastructure like transportation networks, overhead power lines, telephone lines, connectivity, etc. With the emergence and implement of the information and communication technologies in the emerging countries since the 1980-1990’s, rural India has been kind of ignored area, except that ICT initiatives have been implemented to bridge the increasing digital divide since 1990’s, not between emerging countries and developed countries that time but between rural and urban areas. It is especially there that inequalities are indeed stronger. Therefore, it is interesting to approach the question of ICT4D in the following way: Do they positively discriminate women by empowerment initiatives for instance? We will see it is rarely the case ICT4D to change existing and contextual socio-cultural features of conservative rural India, but rural initiatives, not necessarily focusing on ICT as an “end” but as an “enabler” or just a “complement”, can in a certain sense lead to woman empowerment like it is the case with a franchising business solution of the private and franchise company called Drishtee: the woman health franchisee15 . 15 http://www.drishtee.com/strategic-solutions/health/
- 34. 26 STATE DIVIDE The IndianPopulation Census 2011 investigated different variables. I decided to take into account the following ones: state, population, areas, literacy rate, IMR, percentage of phone users, percentage of computer users, percentage of computer with internet users, percentage of landline phones and percentage of mobile phones. All the data have been picked up from a website on IMR and literacy rates (Government of India, 2011) and from a website on computer and mobile phone users state wise (Updateox.com, 2012). I have adapted the content from the data of this website (from Census 2011) and organized them in categories; each time I kept the literacy variable and the percentage of population in each area (urban vs. rural) as references for comparisons. I finally decided to put states in different colors according to their level of science and technology development (S&T index) for 21 states (Bhattacharya and Graham, 2008, p. 26). 1. The most advanced states (scores above 0.70; green): Delhi, Goa, Tamil Nadu, Kerala and Andhra Pradesh16 ; 2. The more advanced states (scores between 0.42 and 0.70; yellow): Maharashtra, Karnataka, Gujarat, Uttaranchal and Punjab; 3. Less advanced states (scores between 0.16 and 0.42; orange): West Bengal, Assam, Haryana, Himachal Pradesh, Orissa and Uttar Pradesh; 4. Bottom of the S&T Index (scores less than 0.16; red): Chattisgarh, Bihar, Jharkhand, Madhya Pradesh and Rajasthan. 16 Andhra Pradesh was divided into two states, Telangana and a residual Andhra Pradesh on 2 June 2014. Figure 18 - Level of S&T, 2004-2005 (Bhattacharya and Graham, 2008)
- 35. 27 Results show thatmost of advanced countries are those which have a higher average literate rate among their state population (exception: Andhra Pradesh), while most of the least advanced states are those with lower literate rate. The same phenomenon can be observed regarding the percentage of phone users in the different states: those with a higher S&T have a higher base of phone users in their state. Similar observations and convergences are also done with the following variables: percentage of computers with internet users and percentage of landline phones. They are all both positively correlated with the fact their State is considered as an advanced State. Moreover, I decided to see if there was any relationship between IMR and S&T Index. I found out there was, but that Andhra Pradesh once again was an exception. While Goa (IMR = 11), Kerala (IMR = 12) and Tamil Nadu (IMR = 22) had far lower IMR than the average IMR for the country (IMR = 44), Andhra Pradesh has just more or less the average IMR of India (43). Access to assets like TVs, computers, telephones, Internet and cable services and mobile phones can help to define the level of welfare (Bhattacharya and Graham, 2008, p. 27). Once again, here we can see the top two advanced group of countries we defined before have a higher level of welfare compared to the bottom two other groups. Figure 19 - Household ownership of selected goods and services, 2004-2005
- 36. 28 3.4.4 The resultingdigital divide Mita Bhattacharya and Graham Vickery (2008) wrote a report on the performance, growth and the key challenges of the ICT sector in India. Their work confirmed that even though India benefits from a huge high-skilled manpower in ICT and the hardware and electronics segment has started to pick up, a big part of the Indian population is still illiterate, IT awareness is always low, R&D spending should be increased for benefiting both the IT services and hardware, content creation and data availability should increase for benefiting the private sector and the public sector (through e- governance) and finally better evaluations should be pursued in order to set up good practice in policy design and delivery. The huge challenge of ICT in India certainly results from the urban- rural divide and its underlying socio-economic features, previously depicted, which make there exists a consecutive and significant digital divide between urban and rural areas. The digital divide is an inequality related to access to, use of and knowledge of ICTs by people and “[…] is related to social inclusion and equality of opportunity” (Bhatt, 2006, p. 33). This divide can be the symptom of other divides as it indirectly and reciprocally engenders a differential treatment between citizens or areas according the fact they are in different socioeconomic, sociocultural or even demographic categories (Tongia, Subrahmanian and Arunachalam, 2005). In that sense, it can be depicted into several forms as the TechTarget online dictionary17 (accessed the 10th November, 2014) shows: The digital divide typically exists between those in cities and those in rural areas; between the educated and the uneducated; between socioeconomic groups; and, globally, between the more and less industrially developed nations. Even among populations with some access to technology, the digital divide can be evident in the form of lower-performance computers, lower-speed wireless connections, lower-priced connections such as dial-up, and limited access to subscription-based content. Similarly, the dichotomy ‘technology haves’ and ‘technology have-nots’ is often used to refer “[…] to the gap between demographics and regions that have access to modern information and 17 http://whatis.techtarget.com/definition/digital-divide
- 37. 29 communications technology, andthose that don't or have restricted access.”18 Before the 1990's, digital divide was rather measured regarding the telephone access, while since the emergence of Internet it is essentially the Internet access, particularly broadband, which serves as analysis criterion. (TechTarget, 2014) However, according to what is said in the Markle Foundation’s Report (2003) on National Strategies of ICT for Development, “Digital Divides are not just the result of economic differences in access to technologies (Have’s vs. Have-Not’s), but also in cultural capacity and political will to apply these technologies for development impact (Do’s vs. Do-Not’s)” (cited by Bracey & Culver, pp. 144-145). It means the digital divide is also shaped with social and cultural norms, and that policy and the way ICT is implemented (business model) play an important role. IDENTIFYING DIGITAL DIVIDE There are 4 main aspects that basically feature the digital divide and enable to understand its underlying reasons (Bracey and Culver, 200; Tongia, Subrahmanian and Arunachalam, 2005; Unwin, 2009): 1. Awareness of technology: It is important to understand how ICT can be used and what can be exactly done with technology as long as people are not reluctant to it in their attitude. 2. Penetration and availability (reach of infrastructures): ICTs are not available to everybody everywhere. Infrastructure (power supply, telecom and connectivity) is necessary to take into consideration as it directly impacts other drivers such as accessibility and affordability. 3. Accessibility (access to services and appliances): It is related to the ability to use and consume the content ICT provide, both lingual and technical. Because of institutional and infrastructural lacks, rural and remote areas have varying information and communication needs that are not satisfied. It is first essential to identify and understand these needs regarding their area of concern and next comes up the question how ICT could fulfill them through their use. 4. Affordability: All ICT costs must be affordable for people and not exceed a certain threshold comparatively with their revenue to be generated (not more than 10% of one’s income). Otherwise, their impact will be negligible and not sustainable. They include life-cycle costs 18 http://whatis.techtarget.com/definition/digital-divide
- 38. 30 (called total costsof ownership – TCO), hardware, software, connectivity, etc. They are a function of pricing and business model (Barrett and Slavova, 2011, p. 18). Telecommunications policy generally uses the concept “Universal Service” when it is possible for a service to be accessible, available and affordable. It is only the case in developed countries or in developed urban areas of emerging countries where every individual or household can privately use ICT at home or through wireless devices. Contrariwise, telecommunications policy uses another concept “Universal Access”, which aims at expanding the access to ICT at remote communities, often for the first time. It is typically the case in rural areas of emerging countries where access to ICT is especially community, public or shared accessed. Figure 20 - Universal acces vs. Universal service (Barrett and Slavova, 2011) Michael Barrett and Mira Slavova (2011, pp. 17-18), respectively Professor of Information Systems & Innovation Studies at Cambridge and ICT Researcher at Leeds, distinguish more precisely the three different kind of access that cause the inequality related to accessibility and availability of ICT between developed and developing countries or urban and rural people like in our scope of interest: 1. Access to services consists to: a. the ready availability of content (resources), fulfilling users’ roles as citizens, producers, and consumers (Barrett and Slavova, 2011, p. 17); b. the ready availability (to those who are not experts in the technology) of network access and appropriate support services through commercial vendors (Barrett and Slavova, 2011, p. 17); c. the availability of formal and informal learning facilities for developing network literacy (Barrett and Slavova, 2011, p. 18);
- 39. 31 d. and theready availability of channels through which individual users can participate in decisions about telecommunications services, their social inclusiveness, and the public accountability of their provision (Barrett and Slavova, 2011, p. 18). 2. Access to appliances is: captured by the physical layer of ICT hardware devices and the logical layer of software tools on these devices. With its twofold (hardware and software) nature, access to ICT appliances links the supply of ICT infrastructure with the provision of services targeted at end users (Barrett and Slavova, 2011, p. 18). 3. Access to infrastructures or carriage facilities layer is: a physical technology layer consisting of installed network capacity, network connectivity, and interoperability standards (Barrett and Slavova, 2011, p. 18). Figure 21 - Access to services, appliances and infrastructure (Barrett and Slavova, 2011) UNDERSTANDING DIGITAL DIVIDE First, it is important to remind, even though we conclude to clear disparities in the way Indian people have access to ICTs comparatively to where they live (urban versus rural area), the digital divide is not always related to the urban-rural divide studied and there exist other divides that can also explain the digital divide such as the “gender divide”, the “states divide”, and finally the “educated–uneducated“ and the “rich–poor” divides in urban areas (Rao, 2005, pp. 363-364; Bist, 2007, p. 703). Nevertheless, the target of this work is only to focus on the digital divide between the urban ‘technology haves’ and the rural ‘technology have-nots’.
- 40. 32 Moreover, most ofthe time, the digital divide refers to the global digital divide or technological gap between developed and developing countries. However, the digital divide can also refer to the national digital divide throughout a country. Pairs of segments can differentiate individuals of a same nation. For example, the digital divide can be considered between men and women, literate and illiterate, educated and uneducated, rich and poor, young and old people, etc. Additionally, the digital divide can be attributed to geographic divides such as between political areas, or more precisely between developed and developing areas (Rao, 2005). At the same time, gender, educational, economic and geographic divides are correlated to inequalities related to developed and developing areas within a country (urban-rural) (Prasad, 2004). If I take again the framework of the four main reasons identifying the digital divide, I could explain the difficulties encountered in rural areas compared to urban areas: 1. the level of openness in using ICT and awareness in their potential is very low in rural and remote areas (awareness), 2. there is a lack of accessibility to the facilities because of remoteness and low economic attractiveness for the connectivity providers compared to cities (availability), 3. the level of needs that should be satisfied is very high because of remoteness and lack of availability of service providers and adequate content (accessibility), 4. and the capacity to pay for devices and use is very low compared to urban areas where population is on average much richer (affordability) Important reasons that make there exists the digital divide between urban and rural areas in India is that rural areas are missing electric infrastructures and internet services necessary to support ICTs. This phenomenon, mainly caused by geographic remoteness, little concentration of population and low funding for ICT installations, limits the information access and the communication possibilities for rural people. For instance, in many rural places it is frequent to be confronted to power outages, while in urban places people get use of well-maintained electrical service and have facilitated and fast information access as well as new technology with easy reach. Moreover, due to remote and with limited access locations, rural people have not always reliable access to the internet, while urban people rarely encounter issues to be connected to the internet. There is a lack of base infrastructure in other words. As results, teledensity is very low in rural India (see next figures) and fewer are the users of personal/individual digital devices (see appendix). Moreover, there is low
- 41. 33 bandwidth and remotenessof certain locations raise barriers of reliability and availability to universal access to ICT (Baffour Kojo and Lu, 2003). Therefore, if we have a look at the teledensityxi in India, which is the number of telephone connections (telephone lines or mobile cellular subscribers) for one hundred people living within the same area, we get that in rural areas teledensity equals 42.67% in 2013 compared to 74.02% for whole India (TRAI, 2014). Rural teledensity in India has more than quadrupled since 2007. In 2004, India still had a very low teledensity compared to the World if we look at the table below. Since that time, rural teledensity in India spectacularly grew to 42.67% in 2013 from 1.7% in 2004. At the moment, it is even growing faster than urban teledensity. The same phenomenon is observed regarding the number of connections: 282.29 million rural connections in 2011 (most of which are wireless), compared to 4.84 million (only landline) phones in 2000. It is largely due to the expansion of mobile telephony the private sector contributed to. Alternatives to mobile phones even exist: Public Calling Offices and Village Public Telephones are available in almost every inhabited census village in the country (Gulati, 2011, pp. 3-4). Figure 22 - Tele-density (rural/urban) 1999-2006 (Bhattacharya and Vickery, 2008) Figure 23 – Rural/urban teledensity (Subramanian and Arivanandan, 2009) Figure 24 - Status of telecom indicators, 2005 (Bhattacharya and Vickery, 2008)
- 42. 34 Knowing that thepopulation of India is over 1.2 billion people in 2014, it is quite interesting to know, however, that still only about 120 million people have for instance access to internet, which gives a very low penetration rate of 10% if we compare with developed countries that have penetration rates of internet close to 75% as it is the case in Europe. Therefore, India is dramatically an exception in Asia where the average internet user rate is about 35%, instead of 10% in India as above-mentioned (International Telecommunication Union, 2013). The level of literacy and the ability to use ICT systems (computer literacy or e-literacy) are two other critical factors that positively impact awareness and in turn increase adoption of ICT (Grimshaw and Kala, 2011). Those people who can use computers have better chance to be empowered by the services provided in different areas and to become regular users. Although India has more than 200 universities mainly concentrated in urban areas, illiteracy always stays a big problem (Mathews, 2001). This is very clear to note differences between urban and rural areas, taking into consideration the gender, which is of huge importance in India regarding discrimination (Census of India, 2001; Census of India, 2011). In 2001, the male literacy rate was 71% in rural areas versus 86% in urban areas and the female literacy rate was 46% in rural areas versus 73% in urban areas. In 2011, the male literacy rate was 78% in rural areas versus 89% in urban areas and the female literacy rate was 58% in rural areas versus 79% in urban areas. When talking about the age pyramid, it is also interesting to point out differences: Young people have today a facilitated access to education compared to their parents (World Bank, 2014). In 2001, the male literacy rate ages 15 and above was 73% versus 84% ages 15-24 and the female literacy rate ages 15 and above was 48% versus 68% ages 15-24; In 2006, the male literacy rate ages 15 and above was 75% versus 88% ages 15-24 and the female literacy rate ages 15 and above was 51% versus 74% ages 15-24. We can then note that the female literacy rate is the one which has the more increased over time, especially in rural areas with a 12 percentage point increase from 2001 to 2011, but more precisely for the females literacy rate ages 15-24, where it is a 6 percentage point increase from 2001 to 2006.
- 43. 35 Moreover, it isvery interesting to note for the female literacy rate there is each time between 20-30 percent increase whether it is in rural versus urban areas, or ages 15 and above versus ages 15-24. Furthermore, the fact that there are 18 languages officially recognized in India does not help people to get access to knowledge shared by ICTs as there does not exist exhaustive knowledge on the internet for each language. According to an infographic from Smartling, there was still around 40% Internet world’s content in English in 2000 (compared to 80% in 1996). Even though the dominance of English dropped with the growth of the non-English population in the middle of 2000’s, English internet content remained high with around 25% in 2011. (Becker, 2007, p. 1188; Techinasia19 , 2012) As we can see on the infographic, very few of the Internet world’s content is in languages recognized by India while about 10% of the world’s population come from rural India. Therefore, there still exist critical issues for rural India where people are disadvantaged as unable to find adequate content in their own native language or dialect if they want to access the Internet. It is called the language divide. (Rao, 2005, p. 364) 19 https://www.techinasia.com/dominant-languages-on-internet-english-chinese/ Figure 25 - Internet world's content (Techinasia, 2012)
- 44. 36 4. Bridging digitaldivide and driving development As we previously pointed out, rural areas of India lag behind urban areas as they do not have the infrastructure available, accessible, and affordable enough to provide access to and use of and knowledge of information and communication technologies. In that sense, there is a social inequality between urban and rural areas that is called digital divide. Subsequently, rural India is somehow excluded and marginalized from the socio-economic development of India. Bridging the digital divide is a first step necessary to overcome before trying to drive development through ICT. Since the 2000's, there has been a huge international debate on the impact ICT could have on the productivity and the growth. Most of the results and conclusions which emerged from that debate converged to admit there was a positive effect resulting from ICT, so that it could be an interesting driver for developing country. The others, more skeptical, summarized their position as follows: “you can’t eat computers” (Steinberg, 2003, cited by Kendall and Singh, 2006, p. 1). Indeed, for developed countries, where critical infrastructures and institutions existed, studies found out positive productivity impacts of ICT at the micro-level and aggregate level, while for developing countries, especially BOP markets where infrastructure were poor and institutions were weak (Tarafdar and Singh, 2011), there was still low evidence. However, Kendall and Singh (2006, p. 1) admitted: “Nevertheless, there are many situations where IT can deliver real benefits and cost savings either as an alternative, or as a complement to physical infrastructure development.” In that sense, ICTs were considered by many as an “inherently enabling metatechnology that [could] bypass or leapfrog institutional and infrastructural obstacles” (Wade, 2002, p. 460). Tripathi, Singh and Kumar (2012, p. 825) defined five livelihood assets which ICT could impact: 1. Human capital: Enhanced access to education though distance-learning applications and tools and more adapted and appropriate services for local communities (regarding their language and culture). 2. Natural capital: Updated natural resource records such as land, cool etc. and appropriate decision making thanks to facilitated communication with stakeholders (state, landowners, etc.).
- 45. 37 3. Financial capital:Established banking in rural areas such as loans and savings schemes through micro-credit initiatives. 4. Social capital: Facilitated networking with a much wider community impact and with cost and time reduction for social networking goals and employment opportunities. 5. Physical capital: privileged access to markets and market information (supply and demand) for improved decision making. Figure 26 - Livelihood assets (Tripathi, Singh and Kumar, 2012) ICT access and use can help villagers to shape their attitudes of change in actions in the sense the information and knowledge they can acquire through ICT-enabled services can in some ways enable them to take better decisions and to make more efficient actions in their activities. As long as economic and social resources or capabilities are provided, they can “interpret information into usable knowledge”. It finally leads to empowerment and opportunities in that case. Thus, ICT access and capabilities can be considered as fundamental steps in the Knowledge Economy (Tongia, 2006, p. 4). ICTs can therefore empower rural and remote areas by leading them to rural development. As a result, rural communities acquire independence and capacity to improve their living conditions and level of development (Balit, 1998). The possibilities ICTs provide in connecting people and sharing information between them has even completely turned the rural development into a new paradigm: the transition from a traditional society to a knowledge society (Meera, Jhamtani and Rao, 2004).
- 46. 38 Indian villages havetoday the opportunity to get connected to the whole country by broadband and internet telephony (Voice over Internet Protocol – VoIP). The trend and pattern of growth of the ICT industry in India, such as for instance the numerous e- governance initiatives which emerged and the positive teledensity variation across states of India, is however more carefully analyzed by Varma and Sasikumar (2004) who explain that “many studies have confirmed the positive pay offs of IT in enhancing growth and development” (p.22), but that the “major impediment for ICT diffusion [in India] is the lack of sufficient infrastructure” (p.32). As explained in Making ICT infrastructure, appliances, and services more accessible and affordable in rural areas (Barrett and Slavova, 2011), ICTs have definitely played a positive impact on income growth in developing countries (Röller and Waverman, 2001; Waverman, Meschi, and Fuss, 2005; cited by Barrett and Slavova, 2011). ICTs generate new income channels and increase the quality of life in rural areas (Goyal 2010; Jensen 2007, cited by Barrett and Slavova, 2011). Therefore wider access to and bigger use of ICTs throughout India should certainly reduce inequalities in income and quality of life between rural and urban areas (Barrett and Slavova, 2011). 4.1 How to bridge digital divide? There are challenges and opportunities to bridge the digital divide in India, in the sense it could reduce the gaps or inequalities between the “haves” from urban areas and the “have–nots” from rural areas, in order to access ICT. Filling up the existing digital divide we explored in the previous section needs measures of change in the 4Cs Framework to be considered. Moreover, the ICT policy is very important and should be considered as well. Therefore, it constitutes the fifth point of this section. 4.1.1 Computing As rural people are very poor, it is necessary to develop technology cheap enough and effective at the same time in order to make rural access to ICT possible and robust. An individual and low cost solution (personal mobile phone) compared to an individual and unaffordable cost solution
- 47. 39 (personal PC) ismore and more frequent in rural India, while a collective solution of sharing access and use of ICT (ICT-enabled kiosk) could be helpful and useful for people with low financial affordability and for huge number of unreached people to serve. Frugal innovation is required in hardware and software, in order to make the computing as simple and affordable as possible and as adequate as possible, too (Tongia, Subrahmanian and Arunachalam, 2005). 4.1.2 Connectivity As access to the internet and the telecommunications remains a huge challenge in rural India since the rural villages are geographically dispersed, low populated, remote and poor, the connectivity is essential to provide value over time. Frugal innovation could here help as well by providing affordable and efficient connectivity systems adapted to the context of rural India. As we previously said, literacy is still a huge challenge in rural areas and the solution to encounter it is multimedia, so that broadband connectivity is needed. Terrestrial wireless and satellite technologies are connectivity technology options that can be applied to facilitate ICT access in rural and remote areas as they do not require wireline networks. The big advantage with satellite technologies is this solution can be easily and rapidly implemented and the network coverage can then be remote and reach isolated areas, while wireline technologies are very difficult and long to be widely extended. Finally, this is to remind connectivity is more than connecting to the internet; it also concerns interconnected systems like sensors and connected appliances like tv, radio, etc. (Ibid.; Rao, 2005). 4.1.3 Content The local content and languages should be available to users. The content provided through e- services should help to empower rural people and facilitate the emergence of user communities. Relevant content is necessary in order to address adequately the needs and requirements of ICT users and it depends on the capacity of the ICT designer to customize the content solutions according to the context in which they are locally used. Some features impact the contextual nature of the content such as the location, the culture, the language, etc. (Ballantyne, 2002, cited by Glendenning and Ficarelli, 2012). Other features concern more the typology of the service
- 48. 40 provided: e-agriculture, e-health,e-education, e-government and other online or offline services can help to bridge the access to information and communication in their related field, as long as they are consistent, value-added and consequently used by the community (Tongia, Subrahmanian and Arunachalam, 2005) 4.1.4 Capacity It is essential to educate people of rural India about ICT. When starting any ICT initiative, the first step is to raise awareness around it; make that people know about the nature of the technology you are providing them and the potential it can deliver. They especially have to get in mind what will be the implications for them and how the ICT solution would be able to answer their needs and requirements. However, it not that easy to make people understand how the value propositions of services delivered by ICT could help them in their activities and hobbies (Baffour Kojo and Lu, 2003). E-literacy programmes can offer opportunities to villagers to acquire skills by the use of digital technologies such as information and computer literacy, information reading, handling and interpretation skills, etc. which can subsequently be of help since they can support users to become e-literate enough to get information and knowledge, so that they will finally be empowered. In these programmes, the Government has a major role to play in fostering empowerment of the rural citizen through e-governance. Many initiatives from states like Andhra Pradesh with the e-governance initiative Mee Seva for instance, where e-government services are provided by the State to its citizen, have emerged the last century for empowering the civil society living in rural and remote areas (Tongia, Subrahmanian and Arunachalam, 2005). 4.1.5 ICT policy The first electronic computer arrived in India in 1955. It is at that time that the Committee on Electronics was initiated (August 1963) and that India thereafter really started its first IT policy in the 1970's with the provision intent of imported hardware for software exporters to be facilitated (Bhattacharya and Graham, 2008, p. 9; Heeks, 1996, p. 42, Mukerji, 2013, p. 34). The policies during the 1970s and the 1980s especially focused on development of domestic software and
- 49. 41 hardware industries byrestricting with high tariffs competitiveness and growth: Import tariffs were high (135% on hardware and 100% on software) (Dossani, 2006, cited by Bhattacharya and Graham, 2008, p. 9). The Government of India played a key role in the sense it became a facilitator of the IT industry instead of just being a regulator of IT goods and services (Evans, 1992; Heeks, 1996, p. 50, cited by Mukerji, p. 34). Therefore, the Government of India facilitated provision of private investments (IT sector and physical infrastructure), increased human capacity (focus on computer science in the school system for manpower development), and computerized its administration and tax incentives. The National Taskforce on Information Technology and Software Development (NTITSD) was at that time established (1998) in order to establish long-term plans for driving growth in the IT sector by enabling the private sector to be in a good position to become competitive internationally on the software market (Bhattacharya and Graham, 2008). Competitive advantages targeted technically qualified talents, speaking English, with low-labour costs and more competitive work conditions. There resulted from these public actions growth of the software industry on total GDP of the country and increased employment opportunities in the sector, even though the domestic economy did not directly benefit from the value creation as the sector was essentially working as international software outsourcer and therefore exported the value created outside India (Mukerji, 2013). On Figure 16 (% value-added per sector on total GDP), section 3.4.2, you see how the services sector (mostly impacted by the software industry) is still growing compared to the rest of the economy since now more than one decade at constant around 10% percent growth rate per year. However, the flip side of these generous facilitations and incentives to the private sector to invest and set up software firms in India resulted in “[…] short-run manpower deficit in the other sectors” and the public sector had invest too much energy and funding in doing that, it couldn’t help other sectors of the economy by investing once again in resources and capabilities. This is certainly the reason why the industry has never really grown up in terms of value-added on total GDP of the county compared to another emerging country, China, with some similar features (more than 1 billion people) but with a more important value-added industry sector. ICT policy in India has also been declined in the states of the country with diverse outcomes: Some states did succeed to benefit from the ICT policies, while others did not really benefit from the
- 50. 42 situation. Nevertheless, differencesbetween urban and rural areas remained and even increased as the ICT investments from the private sector were carried out in urban areas since there was infrastructure and institutions there. Therefore, the focus of the government ICT policies did not consider IT for rural development at that time, except maybe concerning some states, like Kerala for instance, which pursued own state policies for empowering their rural population in some areas like health, education, e-governance, etc. (Mukerji, 2013) In 2000, the Ministry of Information Technology has been finally created and a Task Force on Human Resource Development has been asked for thinking at “[...] long-term strategies to increase the number of well-trained IT professionals.” (Bhattacharya and Graham, 2008, p. 9) Moreover, the Education and Research Network (ERNET) has been implemented to connect universities and regional engineering colleges (RECs), in order to decrease still more IT-related customs duties and to make possible 100%; it resulted to the Information Technology Act, 2000 (Ibid.) As the Government of India realized the digital divide it was creating between urban and rural areas with huge ICT sector development and resulting socio-economic impacts in urban areas compared to the low ICT penetration, access and use in rural areas, it decided to create the Working Group on Information Technology for Masses, in order to consider how ICT could be used to empower rural India, so that ICT would reach all parts of the country. There resulted from it the creation of a comprehensive policy framework, whose one goal was precisely to achieve `IT for All´ with wider diffusion and universal access to ICT (Baskaran and Muchie, (eds.), 2006) Figure 27 - From push to pull strategies (ICTlogy, 2008)
- 51. 43 4.2 ICT forDevelopment (ICT4D) vs. ICT and Development (ICT-D) There is a difference between ICT4D and ICT-D, as they depict two perspectives that Maitrayee Mukerji (2013) calls the dominant perspective and the critical perspective. The first perspective considers the transformational and diffusional role ICT can play, while the second perspective considers more the multidimensional impacts of ICT in developing societies (Sreekumar, 2011; Mukerji, 2013). It is important to understand the link between ICT and development in terms of socioeconomic outcomes but also in terms of agencies implied, their policies initiated and initiatives implemented. While the dominant perspective only sees the provision of technology as solution to rural issues, the critical perspective enlightens the importance of the agenda and policies while bridging digital divide and driving development with the support of ICT (Mukerji, 2013). 4.2.1 ICT4D This perspective has been mainly envisioned by international and development organizations as being ICT implementation with development goals in emerging countries. It has been driven by the “[…] liberalization of telecommunication, privatization of public service delivery, and informationalization”. (Mukerji, 2013, p. 16) They have seen the resulting digital divide from the uneven diffusion and access to ICT between developed and undeveloped countries as an international goal to achieve. It is certainly the first Global Knowledge Conference, whose a worldwide network emerged (called the Global Knowledge Partnership) in 1997 in Toronto, (OECD, 2003, P. 7, cited by Mukerji, p. 16) that launched the perspective ICT could achieve sustainable and equitable development. Development reports from the World Bank and the United Nations Development Programme also played an important role in putting forward ICT for development. ICTs are considered as means for development in emerging and poor countries because they can participate as an alternative in the social, political and economic knowledge society. Secretary- General Kofi Annan stated in his Millennium Report (United Nations, 2001, cited by Kendall and
- 52. 44 Singh, 2006, p.1): “New technology offers an unprecedented chance for developing countries to `leapfrog´ earlier stages of development. Everything must be done to maximize their peoples' access to new information networks”. The Millennium Declaration (United Nations, 2000), adopted by 189 members of the UN in 2000, set up 8 Millennium Development Goals (see Appendix for more details) “[…] for improving the existence of many and for saving the lives of those threatened by disease and hunger” by 2015: 1. To eradicate extreme poverty and hunger 2. To achieve universal primary education 3. To promote gender equality and empower women 4. To reduce child mortality 5. To improve maternal health 6. To combat HIV/AIDS, malaria, and other diseases 7. To ensure environmental sustainability 8. To develop a global partnership for development In the Millennium report (United Nations, 2000), it is clearly stated ICT can be envisioned as means for developing communication and information exchange over the globe overcoming different issues related to socioeconomic differences: The information technology sector, in short, can transform many if not most other sectors of economic and social activity [...] This is not to say that the transition will be easy for developing countries, especially the very poor. Lack of resources and skills is part of the problem, inadequate basic infrastructure another, illiteracy and language a third, and, of course, there are concerns about privacy and content. Technical solutions will become available for many of these problems, including wireless access, and even simple automatic translation programmes, enabling us to communicate and engage in e-commerce across language barriers. (United Nations, 2000, p. 34) Therefore, ICT was considered in the beginning of the 2000’s as kind of perfect solution to struggle socioeconomic problems related to the lack of infrastructures, institutions, content and skills in low socioeconomic and remote areas of the world. It was also mentioned how the individual mode of information and communication consumption could be overcome in emerging countries through shared-access facilities:
- 53. 45 [...] Public telecentreshave been established in places from Peru to Kazakhstan. In Egypt, for example, the United Nations Development Programme has helped to create Technology Access Community Centers to bring the Internet and fax service to poor and rural areas. With help from civil society organizations and the private sector, we can expand these pilot programmes to reach even the remotest corners of the globe. (UN, 2000, pp. 33-34) 4.2.2 ICT-D This perspective has appeared as an interdisciplinary approach to reconsider the hype of success ICT4D proponents envisioned for empowering rural communities. The idea behind this critical discourse was to get a multidimensional understanding of the “[…] impacts of ICT diffusion, resistance and acceptance in developing societies challenging varying presumptions of ICT4D.” (Sreekumar and Rivera Sanchez, 2008, cited by Sreekumar, 2011, p. 6) Hence, ICT-D considers the way the different types of agencies set up ICT4D, from the elaboration and application of policies to the implementation and evaluation of initiative. It approaches ICT with the objective to facilitate technology appropriation by the communities (Mukerji, 2013). Due to lack of access to ICT in low socio-economic areas, the ICT4D discourse creates kind of “information poverty” since they consider as much important providing information and communication to marginalized communities as providing them with the basic necessities and livelihoods (Wade, 2002; Wilson, 2003; cited by Mukerji, 2013, p. 24). Hence, the digital divide has been translated into issues of development which could be resolved by ICT4D, so that the supply side of technology (technology and service providers) was considered instead of the demand side (beneficiaries). Therefore, it is more the question of provision of technology which is considered and not the question of development needs and requirements (Mukerji, 2013). The problem with ICT4D is that most of the time they are too much programmatic, technocratic and instrumental in nature and forget to address the problem in nature (Sreekumar, 2011; Mukerji, 2013). The ICT4D initiatives that have been launched during the beginning of the 2000’s were too much optimistic, thinking all issues of development and problems of poverty were going to get solved because of the potential of ICTs (Wade, 2002, cited by Mukerji, 2013, p. 25). When they
- 54. 46 failed, the protagonistsgenerally did not try to understand the reasons of the failure and invoked they were exclusively related to “demand-side constraints like culture, political will, community participation etc.” (Mukerji, 2013, p. 25) Therefore, in order to understand the real impact any ICT initiative can have on development, it is critical to not only focus on the results and impacts, but rather on the mechanisms involved: “[…] assemblage of agencies, their agenda, policies and programmes.” (Ibid) In the critical perspective, ICT is therefore not perceived as “end” but as “enabler”, which cannot by itself empower the marginalized communities if they don’t have “[…] the capabilities and resources available to harness this potential.” (Ibid) 5. The private and for-profit ICT-enabled kiosks 5.1 Definition of ICT-enabled kiosks ICT-enabled kiosks (also called multipurpose telecenters or MPTC) are “[…] facilities that provide shared and mediated access to technologies for socio-economic development” (Mukerji, 2013, p. 28). The access-shared facilities in emerging and poor countries, particularly in remote and rural areas, provide a full range of support services to a specific and disadvantaged group of people (called the “Bottom of the Pyramid”) for developing their local community with socio-economic purposes (Fillip and Foote, 2007; Ariyabandu, 2009; Liyanage, 2009; Mukerji, 2009; Unwin, 2009). They are based on a set of information and communication technologies as follows: hardwares (computers, printing and scanning equipment, telemedicine equipment), softwares, internet connection, etc. Over time, several models emerged with different names but based on the same design as ICT-enabled kiosks: cyber café, multipurpose centers, pc kiosks, mobile Internet units, community multimedia centers, technology centers, village knowledge centers, telehuts, etc. (Ariyabandu, 2009; Fillip and Foote, 2007; Liyanage, 2009; UN, 2009). People can use them as community, learning, technology and business centers at the same time (Fillip and Foote, 2007, p. 1) so that they become a “knowledge hub”: “[…] vibrant centre which is accessible to communities
- 55. 47 to gain, shareand organize knowledge depending on their needs and environment […] [and] acts as an intermediary station between the community and knowledge network” (Ariyabandu, 2009, p. 4) These shared-access facilities provide fee-based or free-of-charge services, depending on the social and/or business goals resulting from the business model of the operator. There can be several criteria to distinguish them (as cited by Mukerji, 2013, p. 39): a) number and type of technologies deployed (Jensen, 2001; Oestmann and Dymond, 2001) b) nature of the agency orchestrating the network – non-government, government and private (Sarkar, 2003; Sood, 2003) c) ownership of individual kiosk – private enterprise or public organization, community or NGO (Proenza, 2001; Gurumurthy, Singh and Kasinathan, 2005) d) basic purpose – developmental or commercial (Proenza, 2001) e) functional orientation – profit or non-profit partnership f) location – developing or developed countries (Oestman and Dymond, 2001, p. 3) and urban or rural areas (Harris, 2001) g) usability – thematic service relating to one specific area or multiple service offerings (Harris, 2001; Sood, 2003) As rural areas severely lack of critical facilities to answer their community needs, ICT-enabled kiosks can serve as platforms for information access, training and knowledge sharing and empowerment. Therefore, their primary goal is to improve the wellbeing of the community by increasing the information access though different areas, which primarily concern rural areas, and drive rural development: agriculture, education, healthcare and other crucial aspects. However, their function is not only to transmit knowledge, but also to serve as a place of interaction between the community members to share the knowledge acquired (Unwin, 2009). 5.2 ICT-enabled kiosks: emergence and evolution of the movement The ICT revolution started in 1985 (Sreekumar, 2011, p. 2), in Europe and North America with the “telecottage” or “community technology center” movement in order to overcome the remoteness and isolation of rural areas where people have low purchasing power and undeveloped
- 56. 48 telecommunication infrastructures (Fillipand Foote, 2007, p. 8; Mukerji, 2008, pp. 2-3; Ariyabandu, 2009, p. 1; Liyanage, 2009, pp. 12-13). At that time, telecenters were considered as shared public facilities where people could access and use information and communication technologies (Colle and Roman, 1991, p. 1; Proenza, 2002, cited by Mukerji, 2008, p. 2). During the 1990’s, the “period of telecentre evolution” (also called “telecentre 1.0”), ICT initiatives started to offer ICT shared-access and connectivity to the public at large scale, especially to middle and low-income housekeepers, developing countries and rural areas with no availability of ICT infrastructures (Fillip and Foote, 2007; p. 8). They were generally implemented as pilot initiatives by civil society organizations or NGOs with the support of donor agencies and governments. The idea behind implementing these shared-access facilities in emerging countries, more precisely in remote and rural areas, was to target marginalized communities (the “Bottom of the Pyramid”) for bridging digital divide and empowering their local community (Ariyabandu, 2009, p. 1; Liyanage, 2009, pp. 12-13). Telecenters were henceforth considered as shared public facilities where low socioeconomic communities could obtain information and communication services they could not get individually for socio-economic interests (Colle and Roman, 2001, p.3, cited by Mukerji, 2008, p. 2). In the end of 1990s and in the 2000’s, the “telecentre movement” (also called “telecentre 2.0” or “telecentre ecosystem”) made scale (Mukerji, 2008, p. 3, Liyanage, 2009, p. 13). The lesson learnt was that “[…] the provision of technology per se will not bring about any change unless and until they fulfil a definite need of the people and are complemented by supporting physical and social infrastructure” (Mukerji, 2008, p. 2). The usability of the shared-access facilities also improved from essentially basic services (printing, browsing, emailing, etc.) to more specific areas of concern for the people (e-agriculture, e-education, e-health, e-governance, etc.). As mentioned Maitrayee Mukerji (2008, p. 2), another specific layer which counted in that “telecenters movement” was certainly the role mediated as intermediary by the kiosk operator between the technology and the people “[…] to overcome barriers of low levels of literacy and skills”. Moreover, the promise in the early 2000’s that ICT could achieve Millennium Development Goals (ICT4D) and benefit everybody everywhere (bridging digital divide) convinced major technology companies in the ICT industry such as Microsoft Corporation, Intel and AMD to consider the
- 57. 49 marginalized and disadvantaged(the “Bottom of the Pyramid”) by “[…] conducting market research on this segment, building diverse philanthropic programs, and creating alliances with civil society organizations and national governments around the world” (Liyanage, 2009, p. 14). This promise could be depicted by the emergence of the private and “[…] profit-seeking ICT for development (ICT4D) industry, which tended to collaborate with public or nonprofit partners, but engaged the private sector as the driving force” (Liyanage, 2009, p. 13). There result of the “telecentre movement” period, the conviction while “universal service” was not possible to provide to everybody on the planet, “universal access” was through shared-access the best way at reaching the most of underserved people possible (Mukerji, 2008, p. 3; Fillip and Foote, 2007; p. 8). Maitrayee Mukerji also pointed out that “[…] the emergence of certain supply side and demand side factors at global and national levels” resulting from the “telecentre movement” (Mukerji, 2008, p. 8): Supply side factors are primarily the “push” factors of a) rapid technological innovations related to satellite and wireless technologies, convergence of digital media, Internet and the World Wide Web (Oestmann and Dymond, 2001, p.2, cited by Mukerji, 2008, p. 8) and b) the need of the emerging computer and Internet industry to expand their market (Dagrón, 2002; Ya’u, 2002, cited by Mukerki, 2008, p. 3). The demand or the “market pull” factors is driven by the hope that information technology will change the nature of interaction in the public sphere with the possibilities of online democracy, participation, digital empowerment and equity just as it has brought about revolutionary changes manufacturing and business processes (Mukerji,2008, p. 3) This period has been characterized by growth and diversification of the types of telecentre models which have been implemented by development organizations, NGOs and private organizations (Fillip and Foote, 2007). According to telecentre.orgxii , by 2007, there were approximately 60,000 government-, community-, and entrepreneur-run telecenters worldwide, respectively over 15,00020 in India at that time (Fillip and Foote, 2007, p. 9). This particular matter opened up questions regarding their sustainability which are covered in the discussion section of this work with a focus on the private and for-profit model of ICT-enabled kiosks. 20 telecentre.org, 2006a. This count does not include cybercafés, which are defined as privately owned, primarily urban establishments providing limited services, such as emailing and browsing (cited by Fillip and Foote, 2007, p. 19)
- 58. 50 5.3 ICT-enabled kiosks:the movement in India In India, the provision and deployment of telecentres has followed different development phases from the 1990’s until the 2000’s. Since their creation, telecentres have essentially been implemented to target rural areas as the poorest socio-economic groups of India, counting for one seventh of the world’s population, live there and suffer from digital divide essentially due to “[…] differential adoption of the Internet facility […]” (Ariyabandu, 2009, p. 2) In 1992, M. S. Swaminathan Research Foundation (MSSRF) organized an interesting dialogue on the benefits of ICT in sharing and spreading knowledge for rural development, more especially for sustainable agriculture (Vasanth and Senthilkumaran, n.d., cited by Mukerji, 2008, p. 4). Nevertheless, as reported by Albrechtsen (Albrechtsen, 1987, cited by Sreekumar, 2011, p. 4): “[…] the first telecentres in India did not appear until the late 1990s.” At the beginning, their deployment was initiated by public policies and conducted by development agencies such as NGO’s, Civil Society Organizations (CSOs) and public sector, with different motivations according their goals pursued (Sreekumar, 2011, p. 4). The phenomenon of village cyberkiosks appeared at that time “[…] to be identified as a major form of development experiment involving the deployment of ICTs for social and economic transformation in rural India” (Sreekumar, 2011, p. 5). In 1998, MSSRF developed the two first Information Villages in Pondicherry (Tamil Nadu) in partnership with the International Development Research Centre (Mukerji, 2008, p. 4), in order to provide telecommunications infrastructures for enabling the dissemination and sharing of appropriate content related to agriculture, education, health, weather, job opportunities, government, etc. (Subramanian and Arivanandan, 2009, p. 108). Another similar project called the Warana Wired Village Project (Maharashtra) was implemented at the same period in 70 villages “[...] on the recommendation of the Prime Minister’s task force on IT to demonstrate the use of new technologies for integrated rural development”. Several pilots including Gyandoot (Madhya Pradesh), SARIxiii (Tamil Nadu) and Tarahaat (Bundelkhand and Punjab) were also implemented in the very beginning of the 2000’s (Mukerji, 2008, p. 4; Mukerji, 2013, p. 36). Since these projects were pilots, sustainability was not taken into account: “[…] affordability, adaptation and adaptation of technologies in rural settings
- 59. 51 were the keyconcerns” (Mukerji, 2013, p. 37). As mentioned by Mukerji (2013, p.37), only government’s projects in partnership with the private sector (PPP) through franchisees survived like Akshaya (Kerala) for instance. This latter exclusively provided e-governance services (with initial e-literacy programme) at that time; now it is also operating B2C and C2B services depending on the services supply choices of the kiosk entrepreneurs (Masiero, 2011). However, in the case of Akshaya, 200 out of 630 original centers had already closed by the end of 2006 (Kuriyan, Ray and Toyama, 2008, p. 99). During the 2000’s, the private sector finally entered the game. Particularly, during the “telecentre movement”, country-level and private organizations like Drishtee, n-Logue and ITC e-Choupal implemented and developed ICT-enabled kiosks as network orchestrators for “[…] earning profits by targeting “Bottom of the Pyramid” communities” (Liyanage, 2009, p. 14). Both Drishtee and n- Logue previously had experienced implementation of ICT-enabled kiosks: “Drishtee was involved with Gyandoot, while n-Logue was the technology provider for SARI project” (Mukerji, 2013, p. 37). Concerning ITC e-Choupal, the goal was to become globally competitive by building up a supply chain network for commodities from the farmers in rural India (Srinivasan, 2007; Kumar, 2005, cited by Mukerji, 2013, p. 37). Within this period, the kiosk design and implementation has been highly considered: “[issues like entrepreneurship, sustainability of kiosks, user fees, basket of services, process and product innovations became [the] key concerns […]” (Mukerji, 2013, p. 37). In that sense, hardware and software providers worked for “[…] prototyping products [for markets] characterized by infrastructural constraints and low levels of literacy (Schwittay, 2008, cited by Mukerji, 2013, p. 37). In the second half of the 2000’s, more precisely in 2007, a new phase called “Mission 2007”, a multi-stakeholder initiative (Mukerji, 2013), has been implemented under the National e- Governance Plan (NeGP). It was formulated by the Department of Electronics and Information Technology (DeitY) for delivering services in a socially inclusive manner to the disadvantaged communities of rural India (Parminder (editor), 2009, p. 1). The Government of India envisioned to allocate “[...] around Rs. 5,742 crore for setting up one-lakh (1,00,000) Common Service Centers (CSCs) under its National e-Governance Plan” (Mukerji, 2008, p. 4). Previous state-led telecentre initiatives of e-governance services merged with that led-government CSC scheme (Singh (editor), 2009, p. 4; Mukerji, 2013, p. 38). The services provided by the CSCs are the following ones:
- 60. 52 Government to CitizenServices (G2C), Business to Citizen Services (B2C), financial inclusion services, educational services, digital literacy programmes, skills development programmes and agricultural services (Shadrach and Sharma, 2013, pp. 12-13). In January 2009, there were already 22,000 CSCs implemented and “the states of Haryana, Jharkhand and Sikkim had completed their CSC roll out” (Gulati, 2009, p. 5). In 2013, there were still more throughout the whole country: over 95,000 CSCs had been rolled out (Kumar, Kumar and Kumar, 2013, p. 34). As on 31st of March, 133,847 CSCs had been rolled out. 21 However, the impacts remain not satisfying: limited utilization of the CSCs due to lack of e-governance services availability (Gulati, 2009, p. 5; Singh (editor), 2009, p. 4; Shadrach and Sharma, 2013, p. 21). Maitrayee Mukerji pointed out a very important factor regarding the telecentres both in her book (2013) and during my interview with her (December 2014): It is very hard to estimate how many telecenters are still operating in rural India nowadays and whether they have high user frequency or not. A report from ITU in 2013 stated that “India has more functional telecentres than the rest of the world combined” (Shadrach and Sharma, 2013, p. 2): 99,000 plus CSCs and tens and thousands of privately-run shared-access facilities. 5.4 Separations at the “Bottom of the Pyramid” The “Bottom of Pyramid” consumers’ situation/market is described in the book The Fortune at the Bottom of the Pyramid (Prahalad and Hart, 2002, p. 2) exactly as follows: 1. Most Tier 4 people live in rural villages, or urban slums and shantytowns, and they usually do not held legal title or deed to their assets (e.g., dwelling. farms, businesses). 2. They have little or no formal education and are hard to reach via conventional distribution, credit, and communications. 3. The quality and quantity of products and services available in Tier 4 is generally low. The above-mentioned facts can explain why it is tough for BOP producers to enter the bottom market and target customers: it is subsequently “[…] difficult to identify, connect with, and market their products to, potential customers (Karsani, 2007, cited by Tarafdar and Singh, 2011, p. 1).” 21 http://csc.gov.in/
- 61. 53 More precisely, BOPconsumers can be defined as the largest but poorest or lower-income socio- economic group over the globe, living mostly in Africa, Asia and South America (Hammond and al, 2007, cited by Tarafdar and Singh, 2011). They “[…] are characterized by poor infrastructure, information asymmetries and weak institutions (Viswanathan et al, 2009), hence are poorly developed.” (Tarafdar and Singh, 2011, p. 6) BOP includes around 4 billion people who cannot afford more than US $1,500 a year. More alarmingly, over a billion people (one sixth of the world population) sustain on less than US $1 a day. Moreover, it is interesting to underline the tremendous income divide between the rich and poor: the richest 20% obtained about 70% of total income in 1960, while the same richest percentage of people accounted for 85% of total income in 2000. Even though the “Bottom of the Pyramid” is often considered as a non-viable market because of low affordability (Karnani, 2007, cited by Tarafdar and Singh, 2011), it constitutes the majority of the world population and a multitrillion-dollar informal and local market as well. The World Bank even predicts the BOP population will count over 6 billion people by 2040. (Prahalad and Hart, 2002, p. 2) According to Prahalad and Hart, the “Bottom of the Pyramid” market depends on four intertwined factors which impact the development of its commercial infrastructure. Nevertheless, it is “[…] a resource- and management-intensive task”, for the reason that “few local entrepreneurs have the managerial or technological resources to create this infrastructure” (Prahalad and Hart, 2002, p. 11). Figure 28 - The commercial infrastructure at the BOP (Ruohonen and al (eds.), 2012) Moreover, it remains complicated to enter and develop the BOP market for the following reasons (cited by Tarafdar and Singh, 2011, p.2)
- 62. 54 1. Remote locationof BOP communities making physical distribution of goods costly (Vachani and Smith, 2008); 2. BOP individuals having low and uncertain incomes (Prahalad and Hammond, 2002); 3. and the presence of “informal” low markets having exploitatitve intermediaries with asymmetrical information access (Prahalad and Hammond, 2002). According to Bartel’s theory of market separations (Bartels, 1968, cited by Tarafdar and Singh, 2011, pp. 4-9), there are four separations which are binding in the case of the “Bottom of the Pyramid” 4, as in the case of rural India, they hinder all kind of services or product exchanges: 1. Spatial separation relates to the geographical distance (given remote, dispersed and difficult-to-access places because of poor transportation facilities available); 2. Temporal separation relates to the time difference (given poor information access); 3. Informational separation relates to informational asymmetry (given low literacy rate and lack of access to information sources); 4. Financial separation relates to difference between willingness and affordability of consumers to purchase what they want (given low skills levels). Research showed “[…] how ICT can shape and facilitate information processing and transactions among entities (i.e. individuals, departments and organizations) […]” and can then play an important role by bridging the four market separations between marketers and customers (e.g. Zuboff, 1988; Armstrong and Sambamurthy, 1999; Weill, 1992, all cited by Tarafdar and Singh, 2011, p. 4): 1. Automate role relates to the computerization of the information for improving its access, speed and accuracy and for reducing its cost. Figure 29 - The World Economic Pyramid (Prahalad and Hart, 2002)
- 63. 55 2. Informate rolerelates to the information itself which enhance decision making. 3. Transform role relates to the transformation which occurs in the way the processes and relationships happen with new forms of information exchange coming from ICT (by reducing the transaction costs as pointed out by Nirvikar Singh, 2004). Based on three research propositions, Tarafdar and Singh (2011, pp. 4-5) “[…] suggest that particular [socio-economic] conditions at the BOP aggravate the four market separations [- Proposition 1-], that the roles of ICT can mitigate the separations [-Proposition 2-], and that reduction of these separations can lead to market development at the BOP marked by increased consumption and exchange [-Proposition 3-].” Proposition 1 is verified by “[…] inadequate access to education, skills, finances and information (Hammond et al., 2007; Viswanathan and Rosa, 2007, cited by Tarafdar and Singh, 2011, p.5), which make BOP constituents economically vulnerable (Narayan et al. 2000; Karnani, 2007, cited by Tarafdar and Singh, 2011, p. 5). Proposition 2 is verified by substituting information flow for physical flow of materials (spatial separation and temporal separation), by speeding-up information flows and processes (temporal separation), by making available information (information separation), (Tarafdar and Singh, 2011, p. 6). Proposition 3 is verified by “[…] greater spatial, temporal and informational proximity […] and thus leads to increased exchange in BOP markets.” (Tarafdar and Singh, 2011, p. 6) Figure 30 - Research Propositions (Tarafdar and Singh, 2011, p. 5)
- 64. 56 Therefore, the conclusionis that ICT can alleviate the spatial, temporal, informational and financial separations resulting from the conditions at the “Bottom of the Pyramid” by helping to drive development in that market. Chrisanthi Avgerou (2008) explained that literature on information systems for developing countries more generally considers telecenters as belonging to the transfer and diffusion discourse, even though some authors would classify them into the transformative discourse because of overcoming social and political conditions such as extreme poverty and bureaucratic obstacles (Bailur, 2007). C.K. Prahalad, Professor in Corporate Strategy at the University of Michigan, agreed with the last position in the foreword of the book Making the Connection: Scaling telecenters for development the challenge of bridging digital divide for the people at the “Bottom of the Pyramid” so that they can access Internet and participate to the knowledge society, can be more especially answered by “[...] the creation of ways for the poor to have shared access to information and communication technologies (ICT)” (cited by Fillip & Foote, 2007, foreword I). In that sense the perspective of ICT-enabled kiosks offers new opportunities for targeting this low- income market by providing them services at affordable price. The model of “entrepreneurship- through-development” for the “Bottom of the Pyramid” “[...] assumes that market-based solutions, private enterprise, and advanced technologies can increase the well-being of the poor and concurrently increase the profits of the private sector [so that] bridging the digital divide [through these principles] is thus seen as a huge opportunity for development” (Kuriyan, Ray and Toyama, 2008, p. 101). In other words, this model argues that “[...] if the poor are treated as consumers, this will lead to positive development outcomes through the generation of opportunity and of wealth” (Hart, 2005, cited by Kuriyan, Ray and Toyama, 2008, p. 101). Nevertheless, the difficulty remains high regarding the context of the market targeted as it is explained later on in the section Discussion of this work: bringing BOP people out of poverty while being affordable and profitable enough to continue to develop and sustain business in that market is not an easy task.
- 65. 57 5.5 The privatemodel The private or the commercial model is based on a private organization which operates as a network orchestrator (Mukerji, 2013, p. 49) of knowledge hubs (Ariyabandu, 2009, p. 4), instead of having a NGO or the Government as orchestrator of the knowledge network. Each ICT-enabled kiosk can then be considered as an independent information and development node (called knowledge hub) within the knowledge network with “[...] a flexible structure to generate and share information” (Ariyabandu, 2009, p. 2). They “[…] serve the community. […] [and] contribute to creating knowledge by providing experience gained from the local communities to the benefit of the global networks at large” (ESCAP 2006, cited by Ariyabandu, 2009, p. 4). Figure 31 - Telecentre/ICT-enabled kiosks network model (Liyanage, 2009, p. 147) Nirvikar Singh, Professor of Social Sciences at the University of California, explained that “in the absence of commercial goals, the organization’s incentive structure is unlikely to be financially sustainable without continual external infusions of support” (2006, pp. 20-21). The private and for- profit model is, according to Singh, required whether a business model wants to achieve scalability and sustainability (Singh, 2006). In that sense, the Millennium Development Goal number eight targeted participation of the private sector in 2000 to “[…] make available the benefits of new technologies-especially information and communication technologies” (Fillip and Foote, 2009, p. 11). There are two main models resulting from the private model approach: the corporate model and the franchise model.
- 66. 58 5.5.1 The corporatemodel A large company can afford a corporate-led venture model (also called private-led franchise model) of ICT-enabled kiosks with direct investments (World Bank, 2009, p. 25; Mukerji, 2013, p. 50). The social goals of implementing these shared-access facilities in rural areas meet the mission and value of the orchestrating organization (Singh, 2006, p. 22). The scope of operation of such a model is then related to the scope of economic interest for the corporation; it is why this model is generally limitedly scaled in rural India, or focuses only on “[…] areas that have significant economic activity.” (Mukerji, 2013, p. 50) Singh underlined that it is not necessarily the whole company which is involved in the project, but just a division can be in charge of implementing the ICT-enabled kiosks. It is for instance the case with ICT e-Choupal (Singh, 2006, p. 21). Maitrayee Mukerji explained this model has been primarily initiated for consolidating the supply chain of the corporate agency involved and for bringing adequate answers in gaining market efficiency of the Indian agriculture (Mukerji, 2013, p. 50). This latter, however, unfortunately results in “[…] fragmented farms, a weak infrastructure, and the involvement of numerous intermediaries (World Bank, 2003, p. 1, cited by Mukerji, 2013, p. 50)”. 5.5.2 The franchise model The franchise model is used as an approach for driving development at large scale of a business model by combining profit and non-profit motives (Singh, 2006, p. 22). This model was promoted by many organizations during the 2000’s as it facilitates scalability and replication. The orchestrating agency plays the role of the umbrella organization and support the whole system. It can be managed either by a public or a private actor, by an NGO or a public-private partnership. The franchises are operated by franchisees who are village-level entrepreneurs and whose role is to apply the standards for technology and services of the orchestrating agency in observance to the licensing agreements with the franchiser. (World Bank, 2009, p. 25; Mukerji, 2013, p. 49)
- 67. 59 At the top,a private enterprise provides limited technical, organizational, managerial and logistic support to its franchisees: trainings, technical support, revenue sharing arrangements, service development, etc. At the bottom, the franchisees engage as entrepreneurs to deliver the services of the orchestrating agency to the end-users (villagers) in return for part of the profits generated. The services are developed in partnership with the public sector (e-governance services) and the private sector which generates revenues based on user or service fees. Both the kiosk entrepreneur and the network orchestrator obtain the revenues thus ensuring the financial sustainability of the business model. The idea behind this franchise model and market-based delivery of services is to foster a market which will then develop on its own with as little intervention from the orchestrating company as possible in order to make it self-sustaining thanks to its for-profit own managed businesses. It is therefore crucial for the franchise model to count on a number of valuable and adapted services for the rural end-users; otherwise, the business model will indubitably fail (Kendall and Singh, 2006, p. 2; Mukerji, 2013, p. 49). 5.6 Typology of services As previously explained, since the 2000s, there has been a hope that ICT can overcome at least some of rural India's social, economic, political and administrative challenges by providing agriculture, health, education, and other social services to the Bottom of the Pyramid, which accounts for over 700 million people in India (Dossani, Misra and Jhaveri, 2004). The services ICT can provide can be divided into different categories according to the type of operations they enable. There are basically three main types of operations ICT can execute (Dossani, Misra and Jhaveri, 2004, p. 2): 1. Informational services: transmission of non-customized information (e.g. weather forecasts) 2. Transactional services: involvement of at least two parties using ICT (e.g. email) 3. E-governance services: transactional services implying the public sector (local, state or national government) Further subcategorization can be done by focusing on the needs ICT fulfils. Listed below are several sections dedicated to all of the areas concerning the need requirements in rural India:
- 68. 60 1. Agriculture educationand information/knowledge sharing (section 5.6.1) 2. Education for literacy and employment opportunities (section 5.6.2) 3. Healthcare information and access to primary care (section 5.6.3) 4. E-governance services (section 5.6.4) 5. Banking and Utility services (section 5.6.5) Figure 32 – Telecentre as outreach window (adapted from Liyanage, 2009, p. 147) 5.6.1 Agriculture In India, agriculture remains the primary occupation and source of income for about half of its labor force (WordldBank, 2014). Therefore, it is very pertinent to consider this economic area in order to improve the overall human development, especially in rural areas where agriculture generates employment (around 50% of active Indian workers) and prosperity in rural India (around 18% of total GDP in 2010, same in 2013), and is therefore central to rural development (WorldBank, 2014). The productivity has increased but it remains quite low and most of Indian farmers are poor because of lack of regulation and because of a system of small and inefficient farmers and unfair primary producers. (Admane, 2014, p. 250) The worst is that system locks any possible growth of the sector, because it provokes a “[…] cycle of low income, low investments, low productivity and low income.”22 22 http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html
- 69. 61 Figure 33 -Agriculture and employment in India (WorldBank, 2014) Different aspects have to be satisfied in rural agriculture in order to drive development. First, we must address the tremendous necessity for agriculture to preserve food security in rural areas since agriculture is the main, and often times, the only source available to feed its population due to remoteness. Also, the farming income should be considered: the more money farmers are able to retain, the greater their purchase and investment power will be. Logically, this will have a direct effect on the the rural economic growth due to increasing domestic demand. Therefore, farmers constantly need information and knowledge that can help them to get more efficient and successful operations and results: rainfall forecasting, cropping patterns, modern cultivation practices, sources of irrigation, market in general and day-to-day market prices information (Unwin, 2009; Kumar and Sankarakumar, 2012). Moreover, the farmers’ need requirements can also be related to specific areas they are novice about such as “diversification of agriculture, promotion of agripreneurship23 , precision farming, hi-tech agriculture, post-harvest management, value addition and proper marketing […]” (Pasad, 2004, p. 106) Most of the time, farmers lack information (information asymmetry) and knowledge (knowledge sharing) to take crucial and beneficial decisions (Unwin, 2009; Glendenning and Ficarelli, 2012). Farmers have inexistent or asymmetric information on global supply-and-demand conditions that 23 Agripreneurship is an embodiment of distinct functions in the market (Mises, 1996); these distinct functions include the recombination of resources in ways that create new value and offers new competitive advantage (Schumpeter, 1950). Thus, the necessary conditions for agripreneurship were derived by Amanor-Boadu (2006) to be innovation and purposeful action. - See more at: http://motresource.com/agripreneurship/
- 70. 62 determine crop pricesand they have at the same time inexistent or limited access to crop management know-how and other valuable information like weather forecasts for instance. ICTs can then play the role of agricultural extension by directly helping the farming communities to take the right decisions based on ICT-related agricultural education and research. It constitutes what can be called the modern farming (Jones, 1997, cited by Meera, Jhamtani and Rao, 2004, p. 1). The Food and Agriculture Organization of the United Nations (FAO) and the World Bank (2000) recommended a framework where the farmer takes the central place of the “agricultural knowledge triangle” including education, research and extension: AKIS/RD (Agricultural Knowledge and Information Systems for Rural Development). (Rivera, Qamar, Mwandemere, 2005, p. 12) In this triangle, agricultural information systems for rural development facilitate use of agriculture-related technology, knowledge and information. The AKIS/RD's system “[...] integrates farmers, agricultural educators, researchers and extensionists, enabling them to harness knowledge and information from various sources to improve farming and livelihoods in rural areas” (Rivera, Qamar, Mwandemere, 2005, p. 13). Figure 34 - Agricultural extension as part of AKIS/RD (Unwin, 2009, p. 50) Agricultural extension is part of a knowledge system that also includes research and agricultural education. They all three involve complementary investments as they are interconnected in a system (Eicher, 2001, cited by Rivera, Qamar, Mwandemere, 2005, p. 13). It is professionally related to education as farming agents work in extension and it is also linked to agricultural research as the knowledge used by agricultural extension stems from agricultural research. In other words, agricultural extension uses and evaluates the information from the agricultural education system and feeds back field observations from the research to this system. The agricultural extension’s purpose is to share information and knowledge to farmers in order to ensure food security and improve their
- 71. 63 agricultural production performanceas it facilitates agricultural process development through credits, supply chain efficiency, marketing, etc. (Rivera, Qamar, Mwandemere, 2005). Subsequently, job opportunities in agriculture will remain attractive and profitable whether ICTs succeed to derive process transformations from the information and knowledge gathered by the farmers, for instance by turning the traditional agriculture into sustainable agriculture. Last summer, I visited an organic farm in Nagavalli Village, close to Bangalore, where the owner had completely turned the farming processes towards sustainability. It paid off as he is now earning more money and some other farmers in the village have followed the same ecological transition. Therefore, ITC can definitely have a stake in developing agriculture as it offers to consider how to streamline the information and knowledge in the best possible way to get used by the farmers in order to optimize their processes. ICTs can play the role of agricultural extension and social mobilization through integrated information and communication by directly delivering information and knowledge to the farmers: commodity prices, agricultural practices, market behaviors and complementary services for “[…] enhanced productivity, income, welfare and sustainable development” (Unwin, 2009, p. 49). Farm applications and forums (telecentre based or mobile based), rural radio forums, SMS applications or even agriculture-related TV programming are good examples of ICT applications for driving agriculture and rural development (Qaisar, Ali khan, Mohd and Alam, 2011; Glendenning and Ficarelli, 2012; Mittal, 2012). Technological advancements can be classified under the following categories: past traditional ICT, initial modern ICT and modern ICT (Glendenning and Ficarelli, 2012; Mittal, 2012). Figure 35 - Evolution of information sources to farmers (Mittal, 2012, p. 15)
- 72. 64 5.6.2 Education ICTs cannot only complement education, they can even be used as a tool for distance learning thanks to computer education based technologies that provide specific courses such as training on farming, tailoring, weaving, and other skills that some schools do not offer to students. ICT related educational initiatives can also provide information on higher education and employment related education by connecting rural India to the world. 2.0. Worlwide science and technologies can be shared with rural India so that its citizens can achieve local development in fields such as health, agriculture and other fields. Also, a Rural Knowledge Network can emerge for enhancing the e- learning capabilities in rural India (Devi, Rizwaan and Chander, 2012; Roy, 2012). However, the main obstacle that rural India faces is the fight against illiteracy in its villages. As it was previously mentioned in the section 1.2 Digital Divide, about 40 percent of India’s population is illiterate. ICT is a robust tool; it is the right means to address groups of people who are traditionally excluded from education due to socio-cultural reasons (marginalized ethnicities, prejudice against females and elderly people, but more generally, people who are not able to afford its cost and access). Generally speaking, many rural schools lack basic infrastructural facilities and therefore are unable to fully benefit from resources such as computers (Roy, 2012). Moreover, transport facilities are also not readily available to children who must travel long distances to attend school. Furthermore, teachers are often under qualified (IBM, 2005; Roy, 2012). As I observed during my visit to Nagavalli Village, English teachers were either unable to speak English with me fluently nor were they able to spell out English words correctly. Teachers are also really underpaid and overbooked; this can be a reason why they cannot provide dedicated education to everyone in the class. At Nagavalli Village, one teacher was on average in charge of more than 30 children. Students who might need more attention are forsaken and can unluckily remain illiterate if no support is made available to them. In order to develop successful ICT initiatives, it is first necessary to improve the local conditions of education, to understand the priority needs of the students and to provide knowledge to users
- 73. 65 (providing proper trainingfor the teachers) on ICT education. Teachers and students should be both educated on how to use computer related technologies and be aware of the possibilities and applications they are provided by ICT. As urban schools benefit from a better access to ICTs since the ICT emergence in India in the 1980s, urban students have quite a better knowledge on the use of ICTs while rural students are often novices in using ICTs. As urban students develop superior competencies in internet navigation, rural students remain completely dependent on their teacher since he or she embodies their only source of knowledge (von Lautz-Cauzanet, 2012). ICT is an amazing resource because it permits education to become asynchronous. From anywhere at any time, we can learn and access knowledge shared by others. Teleconferencing technologies such as Skype are in that sense very popular all over India as they offer the opportunity to discuss with people located at faraway distances at a very low cost. The biggest advantage of ICT is it can facilitate the access to worldwide information as students and teachers no longer need printed and costly books. Furthermore, students and educators can access free, fast, quickly updated information online, as opposed to outdated library resources. Still, by its visual interactivity, ICT even facilitates student attention, learning and retention (Singh, 2006). 5.6.3 Healthcare Although healthcare facilities and human resources in India have continually improved since the 1950s, they are overwhelmed by the fast growing population; the availability of healthcare facilities and professionals per capita has been drastically reduced. The Indian healthcare system is mainly publicly funded and managed, and includes about 23'000 Primary Healthcare Centers (PHCs), 3'000 Community Healthcare Centers (CHCs) and 670 District Hospitals (DHs). (Bhaskaranarayana et al, 2009, p. 160) According the World Health Organization (WHO), the Primary Health Care (PHC)24 system includes 5 essential services that aim at a better health for everybody: 1. Reducing exclusion and social disparities in health (universal coverage reforms); 24 http://www.who.int/topics/primary_health_care/en/
- 74. 66 2. Organizing healthservices around people's needs and expectations (service delivery reforms); 3. Integrating health into all sectors (public policy reforms); 4. Pursuing collaborative models of policy dialogue (leadership reforms); and 5. Increasing stakeholder participation. The Primary Health Care system has been recognized as limited during the past few decades in rural India and it continues running ineffectively in spite of the increasing support of ICT. Its poor performance is due to the absence of quality health services and their high cost, its lack of accessibility due to the remoteness of rural areas and its inability to overcome the healthcare consequences of the population’s growth constitute major obstacles to the amelioration of India’s Primary Health Care System. We can also mention the lack of investments and inadequate facilities in rural areas play a non-negligible negative impact in developing and improving the healthcare system in rural India. (Bhaskaranarayana et al, 2009, p. 160) The quality and efficiency of primary healthcare services are at the moment undermined as long as it is not possible to allocate adequate financial resources in order to attract doctors. District health officers who are qualified doctors are charged to offer promotive, preventive, curative and rehabilitative care to approximately 25’000 people (Murthy, 2008, pp. 4-5). However, one of the biggest issues certainly remains the inappropriateness and the high cost of health interventions or the remoteness of district health officers. Indeed, the 80-20 paradigm could be applied to the healthcare system in India, as around 80 percent of the specialist doctors do practice in urban areas, while only less than 20 percent of doctors provide healthcare services to rural areas (Bhaskaranarayana et al, 2009, p. 160). Also, it is to be reminded that the 80-20 paradigm works out as well in India for the population’s location where around 80 percent live in rural areas and 20 percent live in urban areas. In that sense, there is a tremendous inequality regarding healthcare access in India (Bagchi, 2006, p. 297). ICT could therefore definitely play a crucial role in reducing the cost of consultations and related healthcare services, increasing the access to quality services and providing the rural citizen with information. Community healthcare information networks can allow people to consult with specialists at a regional or national level through ICT: “Advanced computer networks would enable
- 75. 67 high-speed transmission ofcritical medical records and images, X-rays, scans and other relevant information.” Communication technologies provide at the same time the information to the illiterate population about diseases, symptoms, curing process and prevention such as “[…] immunization of children, HIV-AIDS, family planning [etc.].” (Prasad, 2004, p. 107) Telemedecine can be a perfect example of ICT application which can help to provide or support clinical care such as consultations and monitoring patient data through different platforms like mobile phones, videoconference or more generally the Web 2.0 from a remote place (Bagchi, 2006; Ghia, Patil, Ved and Jha, 2013). It delivers the medical expertise available in urban and efficient urban hospitals to rural areas. A very well-known and historic example illustrating one of the first innovative telemedicine initiatives in rural India is when the Indian Space Research Organization initiated SATCom (Satellite Communication) based Telemedecine programme as an application in 2001 to serve rural and remote areas of India with quality healthcare services thanks to satellite connectivity (Mishra, Singh and Chand, 2012). This initiative encountered a major success throughout India, and even though India is currently focusing on “[...] high speed optic fiber based broad band connectivityxiv [...] [and] many of the national telehealth schemes are now based on terrestrial broadband rather than satellite connectivity.” (Mishra, Singh and Chand, 2012, p. 162) However, telemedicine encounters several challenges, which concern the infrastructure problems like lack of energy power and maintenance issues (Tiwari, 2010), the difficulty to handling the ICT systems and understand how it works out (Bagchi, 2006; Tiwari, 2010) and the belief that this technology might not be financially sustainable considering its high initial investment (Bagchi, 2006). Particularly, the opinion that investments in health technologies are not viable on the long run often discourages the health care system to leap forward (Murthy, 2008).
- 76. 68 5.6.4 E-government services E-governmentxv isthe means by which the public sector, namely the national and state government agencies, serves citizen-centric issues through electronic means afforded by ICT for delivering services (Rao, 2004; Unwin, 2009). The latter should not exclusively address citizens, but also business and others in relationship with the government by “[…] utilizing the transformational nature of technology to create a more open, fair and empowered society which is actively engaged in the process of being governed” (Sheridan and Riley, 2006, cited by Unwin, 2009, p. 284). As previously mentioned, the “telecentre movement” has been reinforced by the need of e-governance in rural and remote areas of India, in order to enable “[…] a responsive, accountable, and transparent administration that is accessible […]” (Mukerji, 2008, p. 3). Different kinds of e-government services can be provided, especially C2G and G2C (among others like G2B, G2G, etc.), which have a significant importance as it concerns directly the bi-directional relationships between the public sector and the citizens (Unwin, 2009; Kumar and al, 2013). They can be commonly called “G2C2G” due to the fact that “ICT initiatives may be designed to provide support to local governance as well as should be able to react to queries generated by local needs of the communities/citizens” (Malhotra, Chariar, Das and Ilavarasan, 2007, p. 221). Service applications range from filling out government forms, applying for licenses, requiring birth/death certificates, clearing customs, raising grievances, paying tax, printing land records, etc. (Toyama and al, 2004; Unwin, 2009) E-government services offer proposition values to citizens (Rao, 2004; Malhotra, Chariar, Das and Ilavarasan, 2007; Upadhyaya and Chugan, 2012), which can be summarized in five categories according high-level goals of the World Bank (Unwin, 2009, p. 287): 1. Efficiency, by reducing transaction costs and delays to use of government services thanks to the integration of multiple services from the same source of interaction; 2. Provision, by developing and delivering a provision of government services to the underserved population of rural and remote areas; 3. Responsiveness, by removing consultations of government – direct internet interactions; 4. Accountability, by increasing transparency and eliminating corruption; 5. Participation, by enhancing the citizen participation in public decisions - more democracy.
- 77. 69 5.6.5 Financial andutility services Financial services like banking and microfinance are services that constitute an important delivery service, which serve villagers and facilitate their financial inclusion and socioeconomic development through enhanced access to credit, bill payment and possibility to save money according to their needs (Paul, 2004; Satchidananda and Khanolkar, 2007). Low-cost insurance services, including life, crop and house insurance, can also be provided to villagers (Singh, 2006). Most of the time, need requirements in villages concern services, either online or offline, which are not related to primary needs such as the categories of needs discussed in the previous sub-sections, including, of course, financial and insurance services as above-mentioned. Online services permit to connect rural India with its outside environment. Communication services for utility reasons are very helpful, especially in order to keep in touch with relatives who have migrated to urban regions of India or abroad through e-mail, chat, VoIP (voice communication through IP) and videoconferencing. Information services such as web-browsing, internet research, examination results, employment opportunities or horoscope are good examples of useful services which support the villagers to stay connected with the outside world, in order to fulfill personal needs of information and knowledge and possibly share in return information and knowledge with the rest of society. (Paul, 2004; Toyama and al, 2004; Mukerji, 2013) Matrimonial services also exist, but are mostly used by parents for their children in villages (Bhatnagar, 2003). Offline services take on also an enormous importance as ICT serving as a tool for asynchronous learning. Desktop publishing, offline computer education and local language office software are popular. Information can also be gathered on risk disaster (UNESCAP, 2009). Furthermore, entertainment can also become part a dynamic component within the range services provided: playing video games, watching movies, listening to music, etc. (Paul, 2004; Toyama and al, 2004). However, most of the kiosk entrepreneurs prefer to provide services which are profitable and often make the trade-off to the benefit of commercial self-interests instead of social goals. One last service possibility is to install digital photography and photostat services (Mukerji, 2013). These services encountered huge success as they really answer needs villagers have a high Willingness- To-Pay for: life events like weddings for instance (Toyama and al, 2004).
- 78. 70 6. Introduction tothe case studies After considering ICT for rural development and introducing the private and for-profit model, we can assess ICT can be viewed as means for development and the ICT-enabled kiosk as tool for achievement of the scalability. As previously mentioned, ICT4D has been envisioned to make a significant leapfrog ahead. It has been fostered during the “telecentre movement” in India by private companies through country-level initiatives. In the 2000’s, Drishtee and N-logue, among others such as ITC e-Choupal and Grameenphone Bangladesh, invested in private and for-profit models with the goal of targeting the “Bottom of the Pyramid” communities. (Liyanage, 2009) Everybody knows that generally actors who identify social and business opportunities and understand how to efficiently answer them with attractive and profitable value propositions become successful. However, in the case of rural India, where the BOP market shows several market separations, it is not that easy to come with a sustainable solution. I am going to present three case studies that have been implemented in India through the private and for-profit model: ITC e- Choupal (corporate model), n-Logue (franchise model) and Drishtee (franchise model). The idea is to understand the socioeconomic achievements each business model did realize, but also to depict the challenges each of them encountered. 6.1 Source of data 6.1.1 Secondary data In the bibliography section, at the end of the work, you will find references which allowed me to gather most of the information on the cases and the conclusions regarding achievements and critical issues. The secondary data has been particularly very helpful as I have been able to find out research studies: 1) One specific research study (called by myself Research Study 1) has been conducted on ITC e-Choupal through interviews of farmers affiliated to 4 centers in Wardha districts, in the State of Maharashtra (Admane, 2014).
- 79. 71 2) One generalresearch study on n-Logue (called by myself Research Study 2) has been carried out on 74 kiosks from April 2004 to September 2004 across 4 states in southern and western India: Gujarat (3 kiosks), Karnataka (14 kiosks), Maharashtra (10 kiosks) and Tamil Nadu (47 kiosks). (Kendall and Singh, 2006) The goal of the research study was to “measure how characteristics of operator, village, and kiosk affect the success of the kiosk.” (Kendall and Singh, 2006, p. 11) Figure 36 - Economic characteristics of sample states (Kendall and Singh, 2006, p. 9) 3) One specific research study (called by myself Research Study 3) has been conducted during 14 days in 3 villages in the surroundings of Thirupathur, in the Sivaganga district25 (Tamil Nadu) based on research data on the telemedicine pilot project collected during April-June 2005 (Dakshinamoorthy and Gordon, 2007). As cited by the research authors the reasons to go there were (Ibid., p. 3): (i) n-Logue was pilot testing in several villages around Thirupathur (ii) Thirupathur and Sivaganga district are one of the least developed in Tamil Nadu (iii) The major hospital in the district is located in Thirupathur which is at least 20 Km from nearby villages. 4) One general research study (called by myself Research Study 4) has been conducted in June 2003 in 39 kiosks of the SARI project (see endnote for more information) serving 132 kiosk users in 5 villages of South India (Tamil Nadu) and gathered data on their demographic background, educational status, etc. 25 one of the least developed districts in Tamil Nadu, even though literacy rate was quite high in 2005 (72.5%) and the life expectancy (67.5 years) was higher than average in India (Dakshinamoorthy and Gordon, 2007, p. 3)
- 80. 72 5) One specificresearch study (called by myself Research Study 5) has been done from November 2005 to April 2006 by Maitrayee Mukerji at a Drishtee kiosk in Kesarpur, Uttar Pradesh (Mukerji, 2013) 6) One general comparative research study (called by myself Research Study 6) was conducted in 2004-2005 on 150 of Drishtee’s kiosks and 150 of n-Logue’s kiosks (Toyama and al, 2005). I just want you here to pay attention that the results and conclusions of the above-mentioned research studies, especially specific ones, can in any point be generalized for the whole case study they are related to and can therefore not serve as points of direct comparison between the case studies themselves. There is a double reason behind: 1) The results are non-significant enough because of very low representativeness of the sample given the different contexts in India and the fact each one of the three ICT-related initiatives was scaled in several States of India (with different socio-cultural and socio-economic features and policy). 2) The research studies are not based on a common framework of analysis (because of the difficulty to find quality research studies), so that the data have not been collected and treated in the same way; There would be biases in doing direct comparisons of specific patterns of access, use and performance between the three ICT-enabled initiatives, which I did consequently not. Nevertheless, I found it interesting anyway to mention their insights, so that I was finally able to launch a final discussion on achievements and critical issues of the private and for-profit model based on observations picked up from my literature review, these research studies and the primary data as well.
- 81. 73 6.1.2 Primary data Idecided to conduct a series of interviews on the case studies that I chose. Then, I selected and contacted several Indian experts in information and communication technology, to which I asked a series of questions by skype, in order to deepen or confirm the secondary data previously gathered. An interviewing guide and a summary of these interviews are available in the appendix. I interviewed four people by skype call, Professor K. M. Baharul Islam (personal communication, December 16, 2014), Professor Maitrayee Mukerji (personal communication, December 17, 2014), Mr. Satyan Mishra, Founder of Drishtee (personal communication, December 28, 2014), and Professor Tim Unwin (personal communication, January 5, 2015). Professors Jai Asundi and Rajendra Kumar replied on my request by filling me back the interview guide with their own answers to the questions. You find a biography of each of them in the appendix of this work. 6.2 SWOT analysis For each case study, I use the SWOT analysis, which serves as a business analysis tool to classify, as its acronym indicates, the strengths (S), the weaknesses (W), the opportunities (O) and the threats (T) that each business model entails (Pahl and Richter, 2009, Team FME, 2013): Strengths: internal factors or capabilities that enable the organization to be successful Weaknesses: internal factors than hinder the organization to be successful. Opportunities: external factors the organization can capitalize on to be successful Threats: external factors the organization should mitigate to be successful. Figure 37 - SWOT Analysis template (Team FME, 2009, p. 6)
- 82. 74 The principle isto depict each of the three business models ‘strategy, in order to see how their respective configuration of resources and competences allows them or not to take advantage of their environment (Johnson and al, 2009, cited by Team FME, 2013, p. 4). Through the three cases studies, the SWOT tool enables to raise issues which are gathered into several subsections of the discussion platform following the case studies. 6.3 Methodology In the following three cases I decided to study each initiative as follows: 1. Firstly, I present the context in which the initiative was implemented; 2. Secondly, I describe their respective business and operating model; and 3. Thirdly, I conclude by showing the resulting rural empowerment impacts of each case study; I mean their achievements and critical issues, and I depict their business models’ strategy by using the SWOT analysis tool.
- 83. 75 7. Case study1: ITC e-Choupal 7.1 Context of implementation ITC e-Choupal26 is a venture of the very famous ICT Company, India Tobacco Company, one of India's largest multi-business corporations, with annual revenues over US$2 billion annually. Since 1990, the International Business Division of ITC, the Agribusiness Division (headquartered in Hyderabad), more precisely, is active in agricultural sourcing and trading, with revenues over 1$milliom annually. (Admane, 2014, p. 250) The concept of e-Choupal was introduced in June 2000 by ITC, in order to enable internet access for farmers in rural India so that they can access to price transparency, share information and make e-commerce. The idea behind was to facilitate trading and market information for farmers in the Indian agriculture27 . ITC succeeded to overcome regulatory barriers resulting from the Agricultural Produce Marketing Committee Act (APMC Act), which “[…] prohibit[ed] the purchase of specified commodities (including several that ITC deals in) from any source other than government- designated mandis” (Bhatnagar, Dewan, Torres and Kanungo, 2003, p. 5). The company persuaded “[…] the political and bureaucratic leadership of various state governments that the “spirit” of the act (to benefit the farmers) [was] better served through e-choupals [and] as a result, some states have amended the act (such as Uttar Pradesh), while others have allowed specific exemptions for such new business models” (Ibid., p. 5) Therefore, it enabled the procurement and distribution channel through agricultural transactions to be facilitated “[…] by purchasing from farmers directly by bypassing local markets (called mandis) that are dominated by middle men” (Admane, 2014, p. 250). ITC subsequently operated a reengineering of the agriculture and aquaculture supply chain/procurement process for commodities which nowadays include soybean, coffee, wheat, maize, rice, tobacco, pulses and shrimp (The DeSai Group, 2011, p. 3). Historically, the focus of ITC e-Choupal was exclusively on agriculture commodities, but its business model horizontally as well as vertically evolved over time. 26 Choupal (Hindi) means gathering place (Source: Admane, 2014, p. 250) 27 http://www.echoupal.com
- 84. 76 The early projectfocused on the unilateral relationship or one way supply chain between farmers, which were the producers, and ITC, which immediately paid them. In 2003, the business model iterated toward e-Choupal 2.0, which is basically the core business of e-Choupal still today. Henceforth, the business model was based on a two way relationship between farmers and ITC, where Choupal Saagars (integrated rural service hubs) have been implemented to serve farmers as consumers by providing goods and services which were not previously accessible in rural areas. Finally, the business model 3.0 emerged in 2008, in order to give still more consideration and inclusion to farmers by considering them as entrepreneurs and innovators in plus of producers and consumers. ITC e-Choupal wants in that sense strives for more rural engagement and customized ITC’s products and services based on local demand for positive social impact. (Prahalad and Krishnan, 2011) Figure 40 - ITC e-Choupal timeline (Prahalad and Krishnan, 2011, p. 2) Figure 38 - The mandi system (OpenIDEO, 2012) Figure 39 - The e-Choupal system (OpenIDEO, 2012)
- 85. 77 7.2 Business Model Vision:Sustain ITC’s position as one of India’s most valuable corporations through world class performance, creating growing value for the Indian economy and the Company’s stakeholders. Mission: Enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value. Type of private model: Corporate model Scope of Coverage: by 2006, counted around 36,000 villages in 6 Indian states (UNDP, 2006, cited by Walsham, 2010, p. 12); by 2013, counted 40,000 villages with 4 million farmers using the system linked through a network of 6,500 centers in 10 States of rural India28 . Status: Operational The core business model (e-Choupal 1.0) The e-Choupal operator is called a sanchalak (means operator). This person must be literate and have computer skills. He must be elected among the farmers of the village where e-Choupal stands because he becomes the information mediator between the machine and the farmers who are generally illiterate. He is respected and trusted from the community with extensive farming experience, so that being ITC representative ITC e-Choupal easily and quickly assimilates with the local farming community. ICT e-Choupal provides an extensive training on the e-Choupal system to this person, also called lead farmer, who can then provide the market information to their neighboring farmers in their local languages through the e-Choupal e-commerce system at the ITC 28 http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html
- 86. 78 e-Choupal center heis housing with adequate material (computers and equipment for testing crop quality)29 . (Prahalad and Krishnan, 2011) The information services are provided in local language (generally Hindi) by the e-Choupal centers and provide crop future’s prices, weather information, scientific farming practices, peer groups and crop testing services as well (Walsham, 2010; Admane, 2014). The intermediaries/coordinators for the reception of the produce from farmers are always part of the supply chain as mandi did in the traditional system. They are called samyojaks (means coordinators) and are paid 1 percent commission on each transaction done (Admane, 2014, p. 251). Their role consists to support ITC in several tasks (Annamalai and Rao, 2003; Singh and Khatri (eds.), 2008; Admane, 2014): manage the reception/logistics of the farmer's produce at the ITC procurement hub or collection center which serves 30-40 e-Choupal centers on a 20-30km radius; record and maintain transaction price data; and explore possibilities for new e-Choupal centers by making village surveys and by identifying adequate sanchalaks. The interaction process between ITC e-Choupal and the farmers includes several successive steps (Annamalai and Rao, 2003; Bhatnagar, Dewan, Torres and Kanungo, 2003; Admane, 2014): 1. The farmer gives a sample of his crop to the operator; 2. The e-Choupal operator says a spot quote; 3. If accepted by the farmer, this latter can transport all his crop production to an ITC collection center; 4. ITC pays the farmer within 2 hours. An e-Choupal is set up when a computer and internet connectivity (dial-up connectivity) are made available. It covers around 6 villages and requires an investment of Rs. 40,000 (about $630) with dial-up connectivity); Rs. 100,000 (about $1,500) if it is VSAT that is used for the connectivity (Admane, 2014, p. 250). It is the responsibility of the e-Choupal operator to pay the operational 29 http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html
- 87. 79 costs of thecenter (electricity and internet charges), which vary from Rs. 3,000 to Rs. 8,000 (about $47 - $126) per year, and to manage the sales of the center, and he is total paid a commission 5Rs/- percent per quintal of products sold (Ibid.). However, the remaining of the costs are supported by ITC (around Rs. 50,000 annually) for the support and maintenance of the center, including training of the operator, helpdesk, equipment, etc. (Ibid.). Procurement revenues are dependent from the quality of produce and the transaction itself and are allocated in the following system between the farmers and the company ITC e-Choupal (Admane, 2014, p. 255): The farmers get between 1.5% (minimum) and 3% (maximum) profit per quintal (100 kg); The company gets between about 10% and 15% (maximum); On average, farmers receive 2.5% higher prices than before with the mandi system (Dangi and Singh, 2010, p. 181; The DeSai Group, 2011, p. 3). Several costs are supported by the farmers, others by ITC: Farmers support transaction costs like bagging, transportation, loading and unloading of the crop production, while ITC pays back the total transportation cost to the farmer. Moreover, ITC ensures that modern material handling systems at the collection center efficiently unload the farmer’s produce and this latter is precisely weighted up. (Admane, 2014) Figure 41 - Profit of farmers and e-Choupal (Admane, 2014, p. 255)
- 88. 80 The move towarde-Choupal 2.0 ITC concluded that its core business with e-Choupal 1.0 did not capture enough value through its streamlined network of farming communities: fair and effective transactions through the procurement system answered part of the farmers' needs and requirements, but there were still no supplies of products and complementary services within the reach of ITC and farmers had to find solutions outside ITC's business for buying agricultural inputs like seeds, fertilizers and agrichemicals, and services like insurance and credit. (Prahalad and Krishnan, 2011) Therefore, ITC e-Choupal complemented its network with one-stop shopping infrastructures called Choupal Saagars (integrated rural service hubs), which are situated at proximity of a cluster of 40 e- Choupals and constitute “[…] a marketing platform and storefront for agricultural equipment, personal consumer goods, insurance, health services (including telemedicine), an agri-extension clinic, a fuel station, and a food court” (Prahalad and Krishnan, 2011, p. 5) They are managed with help of an ERP (Enterprise Resource Planning) system to follow the demand and determine the buying price on a daily basis (Ibid., pp. 13-14). Either the farmer could order products (agricultural inputs and fast moving consumer goods) and services through the saagar or the sanchalak. This latter person, doubling as operator and salesman, was also charged by ITC to stock them till “[…] a new individual, with the title of Samyojak, oversaw a region of Sanchalaks, managing the inventory of goods and serving as the link between Sanchalaks and ITC headquarters.” (Prahalad and Krishnan, 2011, p. 6) It results from this new business activity that ITC e-Choupal reinforced the sustainability of its business model given that the farmer henceforth became both the seller and the buyer, so that now ITC e-Choupal had two-way relationships with farmers in rural and previously inaccessible and non-targeted markets. ITC had built a holistic market infrastructure serving the “Bottom of the Pyramid”. (Prahalad and Krishnan, 2011, p. 6) Figure 42 - e-Choupal 2.0 value chain (Seas of Change, 2012, p. 2)
- 89. 81 The move towarde-Choupal 3.0 ITC e-Choupal realized during the phase e-Choupal 2.0 that farmers had become entrepreneurs through the supply chain system e-Choupal had implemented. Therefore, ITC e-Choupal decided to add a business pillar to facilitate business opportunities for members of the rural communities. Figure 43 – e-Choupal 3.0 Business Model (Prahalad and Krishnan, 2011, p. 9) 1st business pillar: Fast Moving Consumer Goods. The FMCG business was started in 2003 under e-Choupal 2.0 to be distributed with the desire to increase the quality of life in rural India by providing quality products and to become the leading FMCG Company in India. During the e- Choupal phase 3, ITC decided to redesign the distribution of the food businesses by streamlining the exchange and transforming it into “[...] an engagement model, where ITC would buy the products from the partner companies and have a central distribution center to distribute the products to the Samyojaks, who would then supply them directly to the retailer.” (Prahalad and Krishnan, 2011, pp. 11) The idea behind was to capture value (data and information) from the digital enabled exchange (through mobile phone technology) between samyojaks and retailers by feedbacking ITC and its partners for co-creating more suitable products. Therefore, Sanchalaks were not involved anymore in the direct purchasing (because of no distribution capabilities), but were in charge of activities they were good at because of their knowledge, experience and social network such as “[...]
- 90. 82 credit assessment, introductionof retailers to Samyojaks, and communication of promotional schemes to customers.” (Prahalad and Krishnan, 2011, p. 11) 2d business pillar: Agri-Inputs &Demo. The business division of Agri-inputs and Demonstration Farms had been reinforced during the e-Choupal phase 2.0 in order to ensure farmers a minimum wage and make them continue to farm rather than emigrate in urban areas for employment reasons. However, demonstration farms were considered a little too much prescriptive and directive from ITC to the farmers (with a limited audience of farmers). Therefore, ITC decided to develop personalized demonstrations enabling more intense and closer connections between ITC and farmers, in order to create the emergence of a knowledge society between the farmers and not only between ITC and the farmers. The new model of demonstration farms are henceforth showcasing improved production and harvesting techniques from leading farmers who are selected by the Sanchalak network “[...] to disseminate the best practices and publicize the activities of the demonstration farms.” (Prahalad and Krishnan, 2011, pp. 11-12) 3d business pillar: Employment exchange. It is a one-stop portal (partnership with Monster.com) for job offerings and applications, training opportunities, and career advice. It is shaped like a networking platform and tries to answer needs and requirements of the rural youth looking for employment outside the agriculture and rural India. The employment portal can be accessed from any computer but the access point remains the e-Choupal centers through the Sanchalaks, who are paid a commission in case the applicant receives an offer letter. ITC and its portal partners get revenues as well from transactions and ad s on the platform. (Prahalad and Krishnan, 2011, p. 13)
- 91. 83 7.3 Rural empowerment 7.3.1Achievements EFFICIENT REENGINEERED AGRICULTURAL SUPPLY CHAIN AND BETTER SUPPORT FOR FARMERS ICT e-Choupal implemented an oustanding alternative to traditional and unfair markets called mandi as they set up a considerable and streamlined agricultural supply chain of numerous village kiosk connecting farming communities and ITC throughout India by creating trust within the farming communities and building the capacitiy of farmers to participate and benefit from its procurement system thanks to ICT access and usage (UNDP, 2006, cited by Walsham, 2010, p. 13). Farmers have then reduced or even removed dependency from the traditional agricultural intermediaries (Bhatnagar, Dewan, Torres and Kanungo, 2003). The e-Choupal centers are run by local entrepreneurs who are literate and have computer skills. They mediate the relationships between ITC and the farmers by supporting the farmers to access and use the e-commerce platform. They also advise the farmers by tracking future prices on the Chicago Boards and the local mandi market for giving pieces of advice to the farmers and helping them in their decision making. Moreover, ITC e-Choupal collaborates with different product and service providers, in order to make available quality farm inputs and financial services for the farmers. Furthermore, the e- Choupal network is complemented with Choupal Saagars (integrated rural service hubs), which provide a bunch of storage, retail, insurance, loan facility, healthcare, agri-extensions and fuel services. (Admane, 2014) Therefore, ITC indirectly benefits from that streamlined and integrated system by ensuring the security or quality control, the lower procurement costs and the sustainability of its supply chain (Dangi and Singh, 2010; The DeSai Group, 2011) and farmers benefit as well from this win-win situation with cost reductions (Seas of Change, 2012).
- 92. 84 It is howeveralso relevant to understand here the importance played by the software technology. ITC actually revolutionized the business processes of its supply chain (for both the procurement channel and the distribution channel) when they decided to use the ERP system (in the e-Choupal phase 2.0) as back-end business platform (real-time integrated with the front-end business platform where the business transactions were executed) for the content management of e-Choupal (crop, language, state combinations). The platform was definitely user-friendly (selection by season, crop, and region) and enabled stakeholders (farmers, tractor manufacturers, insurance firms, aqua product companies, etc.) to get the information data on the business processes they were concerned in through planning and analytical tools. Even the language requirements were overcome (Unicode- based language fonts) and therefore facilitated the user environment compared to the past (e- Choupal 1.0). (Prahalad and Krishnan, 2011, p. 17) Figure 44 - e-Choupal Supply Chain (Prahalad and Krishnan, 2011, p. 4)
- 93. 85 ECONOMY OF TIME(TEMPORAL AND SPATIAL MARKET SEPARATION BRIDGED) With the ITC procurement system, if the farmer is located in a remote area, he prefers the e- Choupal system to the mandi system, as he do not need “[…] to wait for hours, or even days, before the produce [is] sold.” (Admane, 2014, p. 251) Therefore the mandi system is broken up. The Research Study 1 shows results regarding comparison of transaction time between the two systems. It is obvious the e-Choupal system is a better solution for the farmers (Admane, 2014, p. 255). Figure 45 - Research Study 1: Comparison of transaction time (Admane, 2014, p. 255) A regional e-Choupal head explained the situation as follows: “With manual scales and record keeping for grains [in the mandi system], there was delay in weighing and transportation of the grains. With handheld devices for recording inventory and an ERP application for tracking it [in the e-Choupal system], our collection processes are faster and we can get the grain to the mills sooner.” (Tarafdar and Singh, 2011, p. 10) ADEQUATE, TRANSPARENT AND ACCOUNTABLE INFORMATION (INFORMATIONAL MARKET SEPARATION BRIDGED) Farmers had limited or inexistent information and communication access (information asymmetry) and their farming techniques were not so efficient. The local market mandis imposed price and conditions in their advantage and were generally corrupted and ineffective (Prahalad and Krishnan, 2011). On the contrary, ITC e-Choupal facilitates and shares flows of reliable and transparent information and knowledge among the farmers (weather, prices, news, agriculture extension and risk
- 94. 86 management). Therefore, thee-Choupal system improves consequently the productivity, quality and competitiveness of Indian agriculture with support of real-time and, customized and effective information as it enables better decision making concerning cropping patterns and agronomy practices30 . Farmers can get access to e-portals in their local language that show them “[…] local & global market prices, crop management know-how customized to the local agro-climatic conditions, timely and relevant weather forecasts, transparent discovery of prices for their produce, and much more”31 (Chand, 2006). Moreover, with the e-Choupal system losses are negligible because an electronic weighing machine is used, while with the mandi system there were systematic losses (up to 4kg per quintal) because the trolley was weighed with the produce and the wastage level was higher as well (Admane, 2014). Furthermore, measurement results are immediately available to farmers while weighing is done (Bhatnagar, Dewan, Torres and Kanungo, 2003). Therefore, farmers have henceforth confidence in this local organizational capacity (Bhatnagar, Dewan, Torres and Kanungo, 2003) and retrieve kind of social dignity (Prahalad and Krishnan, 2011). GOOD MEASURES, BETTER PRODUCTIVITY AND BETTER QUALITY FOR THE FARMERS AND FOR ITC As ITC e-Choupal provides the farming communities with helpful information like weather forecasts and farming methods, with useful products like high quality farm inputs and with supporting services like insurance, ITC e-Choupal succeeds to improve the productivity and quality (efficiency) of the farmers’ output. The company also indirectly benefits from that situation as that increases the average quality of its procured products and decreases the underlying risks in its supply chain. (The DeSai Group, 2011, p. 2) Moreover, farmers are distributed “bonus points”, in the case if “produce [which] are much higher than quality norm”, to be exchanged in return of ITC products (The DeSai Group, 2011, p. 2). It is a motivation driver which pushes farmers to work for high quality produce. 30 http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html 31 http://www.huffingtonpost.com/s-sivakumar/among-indias-rural-poor-f_b_4117991.html
- 95. 87 BETTER INFORMATION, BETTERPRICE AND DECISION MAKING, BETTER INCOME (VIRTUOUS CYCLE) Farmers traditionally sold their products on marketplaces called mandi where they were forced to be “price-takers” because of their poorness and illiterateness. In the e-Choupal system, farmers directly sell their production to ITC e-Choupal, bypassing the traditional middlemen and wholesale markets which took significant transaction costs in the intermediation of the business relationship: “Commission agents at the mandi used a small weighing scale that was inaccurate and resulted in less revenue in proportion to the produce [and] the wastage level was higher, because the agents tended to throw away some grain while evaluating its quality.” (Admane, 2014, p. 251) With e-Choupal, the farmers have the real time price information available (provision of market prices through the e-commerce platform), so that they henceforth have control over the price choice and can in turn decide the right time to sell their crop production for maximizing their own income. It results from this situation a better decision making and in turn a better income for the farmer. (Ariyabandu, 2009, p. 16) Therefore, the venture-led ICT e-Choupal enables economic efficiency though three factors Maitrayee Mukerji identified in his book (2013, p. 50): 1. aggregation of demands into an only computing system (e-commerce platform) 2. reduction in the transaction cost (because of no middlemen like in the mandi system) 3. better bargaining power for the farmers (because of better decision making, and cheaper and reliable products/services available to farmers) Figure 46 - Research Study 1: Satisfaction with e-Choupal (Admane, 2014, p. 255) In the Research Study 1, 35% of farmers were not satisfied, as they sometimes get higher revenues in the mandi system (1st reason), and they are not welcome back if their produce is of low quality (Admane, 2014, pp. 255-256).
- 96. 88 EMPLOYMENT EXCHANGE PLATFORM ITCe-Choupal implemented during the phase e-Choupal 3.0 the pillar of employment exchanges, which answered a double demand (Admane, 2014, p. 254): 1. Expanding businesses in urban areas were looking for qualified candidates from rural areas, but there were no ways to do match-making with them or it was expensive and time- consuming. 2. As shown in the research study 1, most of the young people did not intend to work in agriculture. Revenues are low and there is high demand for other employment opportunities outside agriculture or additional revenues to agriculture. LOCAL PARTICIPATION The farming communities have been welcomed to get involved in the design phases of the project and sometimes have given inputs and feedbacks for the web platform of e-Choupal, in order to make it user-friendly. Moreover, the sanchalak is respected and trusted from the farming community, which selects him as ICT representative (Bhatnagar, Dewan, Torres and Kanungo, 2003). Furthermore, the farmers actively and socially participate to the e-Choupal ecosystem whose the Hindi name, as a reminder, means “gathering place” in English: information and knowledge sharing, peer-group discussions, decision making, transaction, etc. Therefore, there is strong sense of ownership among the farmers of the community. Figure 47 - Employment exchanges (adapted from Admane, 2014, p. 254)
- 97. 89 During the e-Choupalphase 3.0, ITC also decided to develop personalized farm demonstrations, in order to enable more intense and closer connections between ITC and farmers and create the emergence of a knowledge society between the farmers by cross-learning sharing (Prahalad and Krishnan, 2011, p. 12) ADEQUATE CONTENT, PRODUCTS AND SERVICES AND CO-CREATION IN THE BUSINESS PROCESS During the e-Choupal phase 1.0, ITC decided to personalize the content on its online platform for the heterogeneous farmer groups: “There was a separate website for each of the crop and language combinations (e.g., soyachoupal for soya beans, aquachoupal for marine products, planters.net for coffee).” (Prahalad and Krishnan, 2011, p. 16) During the e-Choupal phase 2.0, these individual websites all have been integrated into only one: www.echoupal.com (Ibid, p. 17). With e-Choupal phase 3.0, ITC decided to engage more in the contextual understanding of its retailers/sellers/sanchalaks and customers/buyers/farmers, in order to better address their requirements with value-added products and services. There was a real willingness to create an open system for innovation, development and co-creation and through the hubs, so that they become an entrepreneurial ecosystem for identifying opportunities “[…] by intercepting, capturing, collating, and reporting emerging trends, tastes, and business propositions in the hub ecosystem.” (Prahalad and Krishnan, 2011, p. 21) ITC initiated the redesign of the distribution supply chain, in order to capture more value (data and information). They eliminated the sanchalaks from the supply chain since they did not provide enough value (low distribution capability and low interest) and streamlined a digital enabled exchange only between samyojaks and retailers for feedback to ITC and its partners in co-creating more suitable products (Ibid.). Here, mobile phone technology (sms messages and mms messages) played the role of vehicle for providing the necessary information to farmers' needs and requests without necessarily going to the e-Choupal center: “For example, a farmer could use his mobile phone to send in a digital picture of a diseased crop to obtain advice on what to do to fix it.” (Ibid., 2011, p. 14)
- 98. 90 Moreover, they tookthe initiative to make the farmers participate in the design and co-creation of the content, in order to develop more adapted content to needs and requirements. While ITC e- Choupal received aggregated data on the individual farmers through the sanchalak during the e- Choupal phase 2.0, ITC also henceforth (with e-Choupal 3.0) used mobile technology to individually connect with the farmers and capture directly information and feedback from them, in order to further develop customized solutions and provide advises to farmers with ITC staff (Prahalad and Krishnan, 2011). Finally, it is absolutely certain the undergoing shift from the pc platform (at the e-Choupal center) to the mobile platform was an enabler for improving customization of e-Choupal services and for facilitating user-friendliness (individual and home appliance) (Prahalad and Krishnan, 2011, p. 17). However, even though the telecommunication network in rural India has been improved and developed over time, there are, I would say, still three issues to overcome regarding the technology the e-Choupal center: 1. the human capacity (limited technology-related capability); 2. the affordability (limited capacity to pay); 3. the connectivity (limited coverage). FINANCIAL SUSTAINABILITY OF THE BUSINESS MODEL ITC claimed its business to be totally profitable and sustainable, arguing that it was able to recover equipment costs from an e-Choupal center in only one operational year (Dangi and Singh, 2010, p. 181). Since ITC is the network agency and a Corporation with shareholders, its business model remains sustainable as long as ITC considers e-Choupal to be a profitable business (Seas of Change, 2012, p. 5). Moreover, ITC decided to diversify its portfolio in phase 3.0 for not only counting on agricultural commodity sourcing and FMCG distribution, in order to continue to expand and scale its business in rural India by exploring new business models. This decision is partly due to the high inflation in 2006 in India when “[…] prices were increasing and agricultural production was suffering” (p. 10), which made realize ITC the importance of the diversification for ensuring sustainability.
- 99. 91 OTHER SOCIOECONOMIC COLLATERALEFFECTS Villagers can also use the center as place of information and communication thanks to internet connectivity. Village children can especially use “[…] computers for school work, games and to obtain and print of their academic test results.” (Admane, 2014, p. 253) INFRASTRUCTURE In rural and remote India, issues can occur with the infrastructure such as “[…] frequent electricity outage and unreliable Internet connectivity” (Bhatnagar, Dewan, Torres and Kanungo, 2003, p. 5). However, ITC did work on getting upgraded telephone exchanges and VSAT systems were used in remote areas. Furthermore, some e-choupal centers were even equipped with “[…] backup batteries recharged with solar panels.” (Bhatnagar, Dewan, Torres and Kanungo, 2003, p. 5) Over time, ITC e-Choupal succeeded to upgrade its connectivity infrastructure so that the e-Choupal centers used broadband VSATs for real-time and fast internet connectivity (Prahalad and Krishnan, 2011, p. 17). Figure 48 - VSAT satellite dish for connectivity (Toyama and al, 2004, p. 7)
- 100. 92 7.3.2 Critical issues SOCIO-CULTURALAND SOCIO-ECONOMIC INCLUSION AND INTEGRATION Kumar (2004, cited by Walsham, 2010, p. 13) suggested that access to the e-Choupal system was influenced at village level by castes, political affiliations and economic size of one’s farm, even though he admitted that further and more exhaustive research was needed to assess this assertion. Moreover, the core business of ITC e-Choupal is to procure farmers' produce and sell it for profit. ITC center should more take into account the village ecosystem and propose other value propositions, in order to make young people stay in rural areas and not emigrate in masses in urban areas. In that sense, it is at a certain point the reason why e-Choupal iterated from e-Choupal 2.0 to e-Choupal 3.0: integration of the platform “employment exchanges” and willingness to make its farming communities become entrepreneurs and co-creators. SOCIO-ECONOMIC IMPACT Moreover, the fact ITC operates a rural consolidation through a kind of “corporatization” or “monopolization” of the procurement and information channels of the Indian agriculture may lead to think “[...] the individual income increase of participating members may be at the expense of non-participating members” (Dangi and Singh, 2010, p. 179). It can therefore be considered like a monopoly as it “[…] promotes corporate dependency of local agriculture and monoculturisation of agroproduction systems” (Singh and Khatri (eds.), 2008, p. 4). The question which comes up behind is how long the monopolistic attitude of ITC will sustain consumer advantage; considering business goals as above to social goals, because of market logic of profitability: “Simple economic logic tells us that the apparent consumer benefits accrued when a monopoly is being established is short lived.” (Singh and Khatri, 2008, p. 3) Furthermore, the most damaging reality is that this monopolistic approach substitutes alternative operators like “freelance government mandi based procurement agents”. The mandi system already markets half less soy than before the introduction of the e-Choupal system (Dangi and Singh, 2010,
- 101. 93 p. 181). Eventhough these alternative operators were inefficient and even not fair, they were part of the rural community and the profit generated and wealth created remained in rural India, while with the ITC e-Choupal system the profit is in the hands of the ITC Corporation. The positive impact of ITC e-Choupal on the community may be then at certain points mitigated, especially for other reasons, too: No real proof the small and poor farmers benefit from the e-Choupal system as the produce requirements are henceforth higher for the farmers; high quality crops require to invest money so that “the e-Choupal system is built around the needs and interests of rich farmers [...]” (Singh and Khatri, 2008, p. 3) An ITC Sagaar store officer in Sehore District (Madhya Pradesh) had reported statistics according the typology of farmers selling through the e- Choupal channel: 70% were medium-large farmers (more than 5 acres32 of land) and 30% were small farmers (less than 5 acres of land) (Seas of Change, 2012, p. 3). Commercial focus on agriculture production and corporate dependency through “monoculturisation” increases prices and reduces local food security (Singh and Khatri, 2008, pp. 3-4); There has already been a cropping shift towards soy plantation (from 50- 90% in some regions) (Dangi and Singh, 2010, p. 181); No “get-involved” possibilities for the local communities to leverage the monopolistic system of ITC. Effective governance should then remain the priority for e-Choupal over time, in order to continue to serve the socio-economic goals and self-sustainability of its shareholders (Seas of Change, 2012). ENVIRONMENTAL IMPACT ITC should more consider the environmental impact, as they already somehow reached the economic impact and the social impact, in order to enable sustainable development in Indian agriculture: agri waste recycling, organic farming practices, and use of bio fuels from waste land (Pant and Negi, 2014). 32 1 acre = 4,046.8564224 m 2
- 102. 94 GEOGRAPHIC SCALABILITY ANDDIVERSIFICATION One of the problems with IC e-Choupal is the scope of its business whose its scalability depends. It is exclusively focused on agriculture related to soyabean and wheat, and therefore ignore other crops in its procurement system (Mukerji, personnal communication, December 17, 2014) such as cotton, fruits, vegetables and jawar. There are subsequently several rural areas of India that cannot be served by e-Choupal. Other business areas could also be integrated within the e-Choupal’s business scope: fisheries, dairy and poultry. (Admane, 2014) CAPABILITY OF SANCHALAKS AS SELLERS During the phase e-Choupal 2.0, the Sanchalaks were not used to sell products and services and manage the inventory as they did not have any business skills and entrepreneurial experience. Many of them “[...] were losing interest in their role and felt that they were wasting time and effort in developing these businesses without much return.” (Prahalad and Krishnan, 2011, p. 6) Therefore, in the e-Choupal phase 3.0, ITC decided to train them in retailing and distribution management, so that their activity becomes effective, time-worthy and profitable as well. TECHNOLOGY ITC wanted to use ICT for answering appropriate and individual needs of farmers based on analytics, so that they “[…] partnered with Nokia to think about how to personalize what each farmer received, and how to develop a user-friendly interface that would secure farmer adoption of using mobile technology for transactions previously conducted through the e-Choupal computer.” (Prahalad and Krishnan, 2011, p. 14) A big issue encountered at that point by ITC was the need of local language.
- 103. 95 7.3.3 SWOT Figure 49- SWOT Analysis of ITC e-Choupal (Author, 2014)
- 104. 96 8. Case study2: n-Logue 8.1 Context of implementation In the mid 1990’s, a group of people at the Indian Institute of Technology (IIT), Chennai, decided to explore ICT solutions to extend internet and telecommunications in rural areas. They created the Telecommunications and Computer Networking (TeNeT) Group, in order to accomplish the mission of reducing network access costs in India by extending telecommunication and internet connectivity to rural areas. (Paul, 2004; Gurumurthy, Singh and Kasinathan, 2005) Existing ICT equipment in India was imported from the West at that time. That was not particularly appropriate for India since it is important to consider the context in which technology is used to produce the best effect and impact. Professor Ashok Jhunjhunwala, from the TeNeT team, explained the situation as follows (cited by Gurumurthy, Singh and Kasinathan, 2005, p. 159): In the West, the cost of providing a telephone line is around USD 800. We use the same technology and it is not surprising that our numbers are similar. But this cost of USD 800 was reached in the West more than a decade back. There too, an operator needsed between 35-40% of initial investment as yearly revenue to break even. However, this amounts to barely USD 30 per month and is affordable to over 90% of the homes. Therefore, homes in the West have been fully wired up quite some time back. Now, reducing the cost further no longer expands the market. Their R&D focus therefore naturally shifts to the replacement market, where more and more features and services need to be provided rather than lower cost products. In India, the situation was quite different regarding the cost of connectivity. The cost of providing a telephone line if considered the same as in Western Rs. 35,00033 (USD 813) would have deduced a monthly revenue between 35-40% of initial investment, Rs. 1,000 (USD 20-25), as assessed by Professor Ashok Jhunjhunwala. The problem was that this amount is not affordable enough in 33 around 43 Rupees equaled 1 USD at that time (Gurumurthy, Singh and Kasinathan, 2005)
- 105. 97 India: only 2to 3 percent of the households could afford this amount and they were concentrated in cities. It is therefore clear enough local ICT R&D had to develop local ICT solutions adapted to the context of India by taking into account the cost-effectiveness (affordability), the usage (awareness), the services (access) and the operational constraints (availability). As a result, the cost per line needed to come down to around Rs. 10,000 (USD 232) a line, in order to get affordable for most of the households in India. (Gurumurthy, Singh and Kasinathan, 2005, pp. 159-160) Subsequently, IIT in collaboration with Midas Communication Technologies and Analog Devices Inc. (USA) decided to develop a local access system for its village-level communications package based on a wireless local loop technology called corDECT (Sreekumar, 2011, p. 144), “since 70% of the telecom infrastructure costs were in the access systems” (Gurumurthy, Singh and Kasinathan, 2005, p. 160). As a result, the local access systems could be connected to a backbone telecom network for very low investment (similarly to the cable TV network): the average cost line was Rs. 11,500 (USD 267) per village (Gurumurthy, Singh and Kasinathan, p .160). As Bharat Sanchar Nigam Ltd. (BSNL), the major state-owned telecom enterprise, did not succeed to financially sustain in providing conventional telephone and internet connections in the end of 1990’s to rural areas because of telecom regulation and business favoring the import of much more expensive systems, Professor Ashok Jhunjhunwala hoped that private companies would opt for the most adequate and cost-effective solution. However, indifference of the public sector and the vendor system (financial advances were offered by multinational vendors to buyers) struggled his plans, so that the first success of corDECT were only in some other developing countries before getting accepted as a standard technology by some telecom operators in India and becoming a commercial success (generating annual royalties of millions of US dollar for the TeNeT group). (Ibid.) The TeNeT group also incubated several ICT-related technologies for rural India (Ibid., p. 161): DIAS -Digital Internet Access System- This product employs Digital Subscriber Loop (DSL) Technology to provide simultaneous telephony and always-on, high speed Internet connectivity on existing telephone cables. A video conferencing software that works on very low bandwidths Local language interfaces and software
- 106. 98 A remotemedical diagnostic kit, with the aid of which a doctor can do basic diagnosis online, and make appointments if required An ATM suitable for villages at a cost 1/20th of normal ATMs A simple SMS and email device appropriate for low cost telecentres. Furthermore, India was a country where the rural telecommunications was traditionally implemented whether license agreements enforced to set up infrastructures. Getting a Basic Service Operator (BSO) license for telephony was consequently very complicated for small players till regulation changed and opened up the ISP license market in 1998 (Howard, Simms and Simanis, 2001, p. 3; Paul, 2004, p. 2). It was the time when the TeNeT group launched n-Logue to serve as rural internet service provider by using the corDECT technology. N-Logue indeed wanted to pioneer a franchised and decentralized business model in order to provide cost-effective and last- mile rural connectivity in rural India. In November 2001, n-Logue has been finally granted an ISP license from the Department of Telecommunication of the government of India (Paul, 2004, p. 9). This license gave n-Logue the possibility to provide nationwide internet services. However, since N-Logue worked on the basis of a franchised and for-profit business models in different States of India, regional licenses and approvals had to be obtained for the location of the Access Center. In that sense, n-Logue tried to leverage relationships with the complex regulatory licensing of protected Indian telecommunication sector with IIT-Madras, in order to provide internet connectivity and telephone service everywhere it operated in rural India. It is however to underline that n-Logue was not able to provide telephony services in areas which were not served by big players because of regulation. In 2003, a new telecom policy unified the license system for voice and data services so that it removed the obligation for telecom companies to provide rural connectivity (Gurumurthy, Singh and Kasinathan, 2005, p. 162). That conducted n- Logue to fail in its attempt to make partnerships with telecom companies (also with the public telecom enterprise, BSNL) to help them fulfill their mandatory quota in providing rural connectivity through n-Logue’s RSPs. Nevertheless, n-Logue started its business model by providing internet connectivity.
- 107. 99 8.2 Business Model Vision:Enhance the life quality of every rural Indian by driving the digital revolution. Mission: Set up a profitable network of wirelessly-connected Internet kiosks in villages throughout India. Scope of coverage: 7 States: Tamil Nadu, Karnataka, Andhra Pradesh, Gujarat, Maharashtra and Madhya Pradesh (Paul, 2004, p. 16) Status: Non-operational since 2007 (Satyan Mishra, personal communication, December 28, 2014) The TeNeT group took its inspiration from the rapid expansion of cable TV in India (from zero to 50 million within a decade) where trained operators went to each house to find subscribers and earned money from them on a monthly basis by providing repairing services on Sunday. Based on such a small-scale entrepreneurship system, manpower costs were strongly reduced, which made the service affordable. Thereby, TeNeT decided to set up a low-cost and distributed business model of delivery for providing rural connectivity through rural service providers (RSPs), in order “[…] to spur demand for internet access through its corDECT technology” (Kumar and Jhunjhunwala, 2002, cited by Mukerji, 2013, p. 37). N-Logue’s business model followed the idea of working on a network of local entrepreneurs with the mission to provide services to rural subscribers. It is based on a three-tier franchise business model that executes the delivery and management of internet services to the end users. The strategy of decentralization envisioned a rapid expansion of the business model to n-Logue. Each tier level worked out independently on a financial point of view but interdependently on an operating point of view (Howard, Simms and Simanis, 2001; Jhunjhunwala and Ramachandran, 2004; Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004; Toyama, Kiri, Menon, Pal, Sethi and Srinivasan, 2005; Ramachander, 2007): 1. At the first level, n-Logue took the responsibility for overall management of the business model. The company made relationships with upstream suppliers for equipment and content
- 108. 100 providers, such ashardware and solution providers, banks, NGOs and governments. They all helped to facilitate and support the business model of n-Logue because of share of interest. 2. At the second level, n-Logue franchised a network of local service providers or partners (LSPs) that were responsible for local management of the network. They were located in each region where N-Logue operated. Most of the time, a business owner was identified and approached to get franchised by n-Logue in order to facilitate the process of expansion. Once the partnership done, the LSPs provided the front-line implementation by setting up an access center in rural areas with support of n-Logue and managed the access center that connected with the internet kiosks in order to afford last-mile access to subscribers in the area: connectivity to Internet and telecom access were provided. LSPs gave the online support and training for the rural population and managed the local content and email services. They also took the responsibility of recruiting local entrepreneurs to operate the village kiosk a lower level of the business model and marketed n-Logue services to private and public actors to increase the subscriber base for better cost-efficiency. Finally, they also proposed after-sales services to subscribers in order to build internet communities. 3. At the third and bottom-tier level, local entrepreneurs or kiosk operators were recruited by LSPs to invest in, set up and manage internet kiosks that proposed Internet and computer-based services for villages. The kiosk services were marketed on a same franchised brand name called ‘Chiraag’, which means ‘enlightenment’. N-Logue offered training, support and assistance to these locally-owned franchise subscribers, in order to guarantee their self-sustainability. They were generally youngsters, women, having passed the 10th standard education level (Jhunjhunwala and Ramachandran, 2004, p. 32). Figure 51 - Figure 51 - Operating model of n-Logue (Paul, 2004, p. 8) Figure 50 - n-Logue's business model (Jhunjhunwala and al, 2004, p. 33)
- 109. 101 The Access Centersdid not require to be managed by telecom experts as a built-in Operation and Maintenance Console (OMCxvi ) and provided real-time monitoring and management of the complete unit system (Paul, 2004, p. 7). They allowed wireless voice and data connectivity to about 400 to 600 connections in a radius of around 25 km (around 3000 square km) from the Base Station Distributor (BSDxvii ) to the Relay Base Station (RBSxviii ), which directly connected to subscribers in a radius of around 10 km (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, pp. 32-33; Paul, 2004, pp. 6-7). They generated revenue through telecom services to subscribers (nominal cost). They operated through Internet connection to the nearest Internet Gateway. This latter was a tower with multiple Compact Base Stations (CBSsxix ) to transmit the corDECT signal. They were equipped with a DECT Interface Unit (DIUxx ) and a Remote Access Switch (RAS - where the Internet traffic is separated and diverted thereby reducing the internet congestion34 ), for simultaneous voice and data access. A technician was allocated to the access center in order to ensure its consistency and quality in case of technical problems. The DIU was remotely connected to the Base Station Distributor (BSDxxi ) with an E1 fiber line, which was more reliable technology than copper wire infrastructure and was energy efficient (less than 600 watts of power, with solar energy capability), too. (Paul, 2004, pp. 6-7) 34 http://www.bbs.com.sg/wll.html Figure 52 - corDECT design (Paul, 2004, p. 7)
- 110. 102 N-Logue generated moneyfrom its business model directly through the operations of the LSPs and indirectly through the local entrepreneurs. The franchise business model was used to get n-Logue’s partners access to the infrastructure and earn money in their turn for ensuring self-sustainability. Two main revenue streams can be detailed: 1. The agency fees were the setup fees paid by LSPs when partnering with n-Logue; 2. Part of the subscription revenues generated by LSPs according to the financing and revenue sharing possibility chosen. LSP generated revenues from internet services (50%), from voice accounts (40%) and from franchisee services (10%) and they had to pay agency fees and financial contributions to n-Logue according to two financing and revenue sharing possibilities (Howard, Simms and Simanis, 2001, p. 13) 1) full deposit model: refundable deposit of $20,000 related to the agreement since n-Logue had set up the access center with the LSP and paid for it. Further investments could be considered depending on the performance of the project initiated. Revenues were split 50:50 with n-Logue as subscription revenues; all assets belong to n-Logue. 2) staggered investment model: refundable deposit of $4,500 in year 1 ($9,000 worth of access center is in its own name) and bank guarantee to recover $13,500 to n-Logue in year 2. Revenues were split 40:60 with n-Logue; all assets remaining in n-Logue’s name. Kiosk entrepreneurs or subscribers set up the internet kiosk for about $1,000 and funded in the range of $700 to $800 (since operators had to generate between 12.5% and 20% of the investment) and they needed to generate about $70-$80 per month to break-even ((Howard, Simms and Simanis, 2001, p. 15; Jhunjhunwala and Ramachandran, 2004, p. 32). The kiosk was furnished with signal receptor, PC with monitor, peripherals including microphone and speaker, digital camera, inkjet printer, etc. (Howard, Simms and Simanis, 2001; Paul, 2004) It provided general information and communication services to villagers like computer education and computer-based education, healthcare services, agricultural services, e-government services and utility services. Several services used IT without internet connectivity such as video games and entertainment in general (Kendall and Singh, 2006). Services generated revenues for the kiosk entrepreneur according to “price points”: basic services were situated between Rs. 5 and Rs. 20; computer education (one hour
- 111. 103 every day forone month) was Rs. 100 and horoscope was the most expensive up to Rs. 150 (Kendall and Singh, 2006, p. 10; Sey, 2010, p. 335). Here below, find the chart of the top services of all the n-Logue kiosks during the first quarter of 2004 (Paul, 2004, p. 24) Singh mentioned out of the Research Study 2 that “[...] through a process of social norms and expectations, kiosk operators [provided] a certain amount of free services that include remote health diagnosis, agricultural techniques and disease information, and basic education.” (Kendall and Singh, 2006, p. 25) Find below, the kiosk services frequency Kendall and Singh mentioned in the Research Study 2 for the 4 States studied: Figure 54 - Kiosk services frequency (Kendall and Singh, 2006, p. 10) Figure 53 - the top services of all n-Logue kiosks, 2004 (Paul, 2004, p. 24)
- 112. 104 Kendall and Singh(2006, p. 26), in the Research Study 2, also found out several empirical results based on multiple regressions, which enlightened a certain number of factors had a significant impact on the success of a n-Logue kiosk and others that did not (see appendix for regressions and tables): Location: significant. Kiosks entrepreneurs who have situated their kiosk close to a main road of their village are significantly more profitable than others within the village. Age: significant. Older kiosk entrepreneurs know more people within the village than young people. Their human capital is higher and results into more customers Seasonality and learning effects: seems significant. It is certainly related to the phased cost approach where the fixed costs increased gradually to let enough time to the entrepreneur to learn its business and perform better: “The higher average revenue of the newer kiosks may reflect a learning curve on the part of n-Logue in their selection process and training regime. 35 ” (Kendall and Singh, 2006, p. 23) Education: not significant. There is no performance difference between a low educated and a high educated kiosk entrepreneur. Gender: not significant. It does not significantly affect kiosk profitability if the kiosk operator is a woman. Caste: significant. The caste designation of the kiosk operator impacts on his/her performance; there is caste discrimination. Therefore, the Research Study 2 shows us that some variables play a significant role in the generation of kiosk revenues: a good location attracts more people, the belonging to a more representative and medium-high socioeconomic caste attracts the people of the same caste and a 35 “[…]average kiosk ages do not differ significantly across the four states, so that geographic variation at that level cannot be the explanation for the observed pattern as discussed here.” (Kendall and Singh, 2006, p. 23) Figure 55 - Highest revenue generating services by State (Kendall and Singh, 2006, p. 27)
- 113. 105 higher human capitaldue to older age makes an higher social networks, and so more customers, too. Let’s just note that in Tamil Nadu, the caste factor was less significant. The reason behind was certainly related to the fact there happened “an early social revolution involving the rise of scheduled and backward castes in a ‘self-respect movement’.” (Ibid., p. 18) Moreover, this State was more densely populated and more urbanized and in turn certainly more contemporary. 8.3 Rural empowerment 8.3.1 Achievements INNOVATIVE, SIMPLE AND AFFORDABLE CONNECTIVITY MODEL The TeNeT group not only developed appropriate ICT for rural India, it also reconsidered the business model behind providing ICT in rural India. The technology n-Logue used (local loop network equipment, ReMeDi systemxxii , etc.) was simple and affordable to use and to implement. The reason why is they had previously enlightened two reasons that made the high cost of providing rural connectivity: the expensive imported technology as previously mentioned and the expensive organizational model of delivery. (Howard, Simms and Simanis, 2001) It is therefore relevant to raise the important contribution n-Logue Communications provided in setting up connectivity in several villages of rural India with the corDECT technology (Ramachander, 2007, p. 189). The CorDECT technology answered the problems of remoteness, the lack of infrastructure and the cost of technology in rural areas. It did not require expensive infrastructure as it was the case with traditional landline or even cellular systems, but just needed 4 system components, in order to make the last-mile link connection for delivering Internet access to telecommunications customers (Howard, Simms and Simanis, 2001, p. 2).
- 114. 106 The central basestation or direct interface unit (CBS/DIU) could assume traffic from 200 to 1,000 subscribers in rural areas. A large subscriber base was then not required to reaching profitability by returns to scale, as the CBS/DIU could easily work for small and dispersed markets. Subsequently, the usage costs of the technology and the infrastructure investment were not that high, which made the technology affordable for rural India (Howard, Simms and Simanis, 2001). This technology of connectivity provided in that sense several advantages we can cite down here from the literature review (Howard, Simms and Simanis, 2001, p. 9; Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 31; Gurumurthy, Singh and Kasinathan, 2005, p. 2; Ramachander, p. 189): ease of installation low capital investments reduced operational costs simultaneous telephone and Internet connectivity or voice and data communication; radio-frequency instead of wires (type of infrastructure); high heat-tolerance (can work at 55°C); low power requirement (at less than 1 KW); 35 to 70 Kbps, see up to 384 Kbps (dedicated connectivity). 25 km coverage (availability when a repeater is used for extension) Figure 56 – corDECT vs. Traditional technologies (Howard, Simms and Simanis, 2001, p. 7)
- 115. 107 COMMUNICATION AND INFORMATIONTECHNOLOGY Three technology innovations were used for the services provided in the n-Logue kiosk (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 37; Paul, 2004): 1) Language applications: N-Logue implemented an office suite package called CKShakti in local language (from Chennai Kavigal Private Ltd and TeNeT): three dual language packs available (between the local language and English). 2) Video-conferencing Software: There were applications for telemedicine, education, and agriculture. TeNeT and Objective Oriented Programming Systems Pvt. Ltd (OOPS) launched a software called iSEE functioning at very low bandwidth. 3) Remote Diagnostics: Once more TeNeT and another partner, Recently Neuro-synaptic Ltd, created a telemedicine ReMeDi system helped to remotely monitor a villager’s temperature, blood pressure and heart beats.More information on this technology are provided later on in the section telemedicine services as support to PHC. Figure 57 - n-Logue wireless access tower (Tirumvallur) (Toyama and al, 2004, p. 7)
- 116. 108 GENERAL INFORMATION ANDCOMMUNICATION SERVICES E-services like e-mail and video mail were provided by the kiosks and encountered success. They were essential tools in order to keep in touch with relatives and family members living or working in urban areas or even abroad. Video mail was more popular in the rural areas since the villagers felt more comfortable with a face-to-face dialogue than mailing (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 33; Paul, 2004, p. 22). COMPUTER EDUCATION AND COMPUTER-BASED EDUCATION Education module of courses (20-50 hours, depending on the level), were offered in order to develop computer skills and consequently increase employment opportunities for villagers. Consequently, the brand Chiraag was created and designed into three categories related to ages and skills of the participants: Red, Blue and Green. Typing courses are also provided to children and adults and villagers can get support for completing their resume before applying for a job. (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 33; Paul, 2004, p. 21) Moreover, remote tutorials were based on a question and answer format by suggesting the answers to be provided and supplemented with a voiceover. Organized in three categories (learn, practice and test), they aimed at supporting children for school assignments in order to compensate the low availability of good teachers in rural areas. They address different topics such as English, Figure 58 - N-Logue kiosk near Pabal, Maharashtra (Toyama and al, 2004, p. 2)
- 117. 109 Mathematics, Science, etc.(Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 33; Paul, 2004, p. 21) For instance, I personally experienced it when I visited during summer 2013 a school in Nagavalli Village where English teachers were really bad at speaking that language most of the time. Spoken English plays here a key role in increasing job opportunities, so that villagers, either children or adults they are, use education modules that have been especially developed to improve their ability to speak English. AGRICULTURAL EXTENSION Videoconference was used to enable veterinaries to give diagnostics, answer questions and remove doubts of the farmer regarding their animals or produces from agriculture. This service was appreciated very much, as it is of first importance for the farmers to get their cattle healthy. Additional information services could also get provided to the farmers such as weather reports, market price and other market-related information. (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 34; Paul, 2004, pp. 21-22) HEALTHCARE/TELEMEDICINE SERVICES AS SUPPORT TO PHC N-Logue had partnered with doctors, hospitals and other partners, in order to provide healthcare services and expertise through its kiosks. A web portal had developed a healthcare platform of information in several local languages: www.webhealthcenter.com/ (Paul, 2004, p. 21) Videoconference through telemedicine could also play a crucial role and even replace somehow the consultation with the patient, either for a specific healthcare or for regular healthcare. As the primary health care (PHCs) clinics were open only few hours per day, telemedicine was somehow alleviating the spatial divide (Dakshinamoorthy and Gordon, 2007, p. 4; Paul, 2004, p. 21). Doctors in towns could remotely suggest remedies or medical advices to patients in rural areas based on their “common ailments such as back ache, head ache, stomach pain which were left without treatment previously” (Ibid.., p. 11). Furthermore, multi-party video-conferencing could also take place. It consisted to publicly connect at the same time to multiple villages with a same doctor away. This way of examination certainly gave still more responsibility and credibility to the doctor. See below a video-conferencing consultation using the software iSEE for eye care with a partner,
- 118. 110 the Aravind EyeHospital, which provides free or low-cost eye care (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 35; Paul, 2004, p. 21). Interactions between the villagers and doctors were more generally supported through the telemedicine ReMeDi system: “[...] the patient’s blood pressure, temperature and heart beat [were] acquired locally in the kiosk and made available to the physician at the clinic, in Tirupathur.” (Ibid., p. 3) Find below on the left the n-Logue telemedicine operational model Dakshinamoorthy and Gordon (2007) depicted during their research study (Research Study 3) they conducted in the village of Thirupathur in 2005 and find below on the right the telediagnostic software working with the ReMeDi system. Figure 60 – Remote configuration (Dakshinamoorthy and Gordon, 2007, p. 7) Figure 61 - n-Logue telemedicine model (Dakshinamoorthy and Gordon, 2007, p. 6) Figure 59 - Remote eye-care consultation (Jhunjhunwala and al, 2004, p. 36)
- 119. 111 The opportunity costwas not that high between telemedicine and face-to-face meeting with doctors in the Research Study 3 since villagers have to afford transportation costs and spend time to go to the hospital, so that “many villagers postponed taking care of a medical problem because of the opportunity cost” (Ibid., p. 11). The doctors and the villagers, however, generally preferred and trusted more the direct human relationship: “physician generally prefer[red] to have a first client interaction in person at Tirupathur, where his primary care clinic is located.” (Ibid., p. 11) Regarding the operational affordability of the villagers, costs (uploading and downloading of information from the kiosk) were indeed not that high. There existed nominal fees for the patients of the telemedicine programme for instance (~Rs. 10) though, in the Research Study 2, most of the villagers from the Sivaganga District (Tamil Nadu) were very poor, flexible payments could be considered to alleviate their low affordability (Dakshinamoorthy and Gordon, 2007, p. 12). Moreover, the doctor was paid a commission based on the telemedicine usage, which could raise up his own interest in using the system (Ibid., p. 4). Furthermore, the villagers’ awareness of the kiosk telemedicine services in the villages increased because of the variety of services provided: “By visiting the kiosks more often, the villagers are exposed to the health services available. This improves their awareness about general well-being and the services they can avail from the remote physician.” (Ibid., p. 11) E-GOVERNMENT SERVICES The village kiosk also offered to solve up many issues related to remoteness and the resulting lack of proximity of the village with the government office. To counter that, internet was used as means to connect villages with the government. E-government services such as birth, death and land certificates were operated by n-Logue, but the result was, however, not often successful depending on the district collector in charge of answering queries such as collecting taxes, duties, other payments and grievances for the government. (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 36; Paul, 2004, p. 22)
- 120. 112 UTILITY SERVICES A photographystudio called Chiraag Photo Studio was often installed in n-Logue kiosks and equipped with a digital camera and a printout machine. This service was very appreciated from villagers (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 34; Paul, 2004, p. 22). Others services could derive from the computer usage by villagers such as making greeting cards, working on desktop publishing (DTP), looking at astrology, playing games, listening to and watching entertainment, reading online news, writing on discussion forums, etc. Moreover, the Chiraag radio could also be used and movies could be shared in the kiosk on television or even computer. (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 37) There was also a Chiraag Children’s Center (CCC) for organizing ICT activities for children on Sunday morning and on weekdays (twice a month) around reading, chatting, gaming, listening and recording songs, etc. (Paul, 2004, p. 23) DATA COLLECTION After consulting references and interviewing some people, it was obvious some socio-economic characteristics had a significant impact on performance regarding the fact they concerned the kiosk operator, the service provider or the kiosk itself. The Kiosk Operator was indirectly in charge of data collection. Data related to land holding, birth and death rates, source and level of income, level of education, etc. could be gathered through the kiosk operations and valued toward the private and the public sectors. However, the effectiveness of this service depended more on the capacity and motivation of the kiosk entrepreneurs. (Jhunjhunwala, Ramachandran, and Bandyopadhyay, 2004, p. 36) 8.3.2 Critical issues HUMAN CAPACITY The human capacity was very important as it constituted the bottom of the business model and the direct relationship with customers indirectly generating revenues for n-Logue. Villagers were first
- 121. 113 attracted by theopportunity to get a job by applying for becoming kiosk operator. There was also kind of prestige for helping the community. However, several kiosk entrepreneurs did not accomplish standardized business hours, which resulted in potential loss of revenues. Therefore, there resulted a high kiosk operators turnover for n-Logue, which could not do anything because of the nature of its business model based on franchise agreements, except training sessions for instance. (Paul, 2004, 16-17) E-SERVICES HARDLY REPLACE EXISTING SERVICES N-Logue encountered difficulty to generate revenues from video-conferencing/telemedicine services. As pointed out in the specific Research Study 3 conducted in 2005 in the Sivagangai district, these services were dependent of three human capacities which were not fulfilled: 1) Human capacity of the villager and sociocultural beliefs: In the Research Study 3, the villagers who were illiterate tended to ignore the existence of the kiosk in the village as they remained skeptical of the advantages they could get provided. More precisely for telemedicine, it could also be related to their inherited beliefs as Dakshinamoorthy and Gordon pointed out in the Research Study 3: Many villagers are illiterate. They have some strong held beliefs about ailments and successful treatments. For example, many of them believe that a shot is necessary for curing some common ailments. This attracts them towards the quacks who many time provide a shot filled with distilled water. (Dakshinamoorthy and Gordon, 2007, p. 12) 2) Human capacity of the kiosk operator/entrepreneur: Some kiosk entrepreneurs had another job outside the business scope of the n-Logue kiosk, so that they were not primarily focused on the kiosk activities itself. There resulted from that situation villagers could not count on reliable and regular operation hours of the n-Logue kiosk (Ibid., 2007, p. 13). 3) Human capacity of the service provider: In the Research Study 3, there was a problem of overstrain of the doctors underlined: “many times the physician [had] to visit several villages during the week in addition to their remote consultation [and] in addition, many physicians also [had] a regular day job at a hospital or private practice.” (Ibid., 2007, p. 12)
- 122. 114 Given that fact,n-Logue therefore had to count on doctors who were ready to sacrifice time and money for the benefit of social goals. However, the doctors-to-patients ratio was quite low. (Ibid., p. 13) Moreover, n-Logue also encountered difficulty with technology (the ReMeDi system of the telemedicine service), since it was at its beginning and was therefore not matured. There resulted connectivity issues, low quality of care measurements and losses of data and time, so that villagers were finally discouraged to come back and avail this service again (Ibid., 2007, p. 12). INCLUSION AND PATTERN OF USER The Research Study 3 on n-Logue’s project in Sustainable Access to Rural Internet (SARI - see endnotes for information SARIxxiii ) in Tamil Nadu, South India, put forth as key findings from Rajendra Kumar and Michael Best that the telecenters do not bridge socio-economic inequalities within communities, as they are used by only one small part of the population user profile belonged to the more privileged categories of the Indian society (Kumar and Best, 2006, p. 1): male (Figure 39), young people (Figure 40) students or relatively more educated (Figure 41), higher-income household (Figure 42) and socially advanced community or upward caste (Figure 50, see in section Discussion) Toyama, Kiri, Menon, Pal, Sethi and Srinivasan (2005) reached the same conclusions regarding customer demographics based on their general research study (Research Study 6) conducted in 2004-2005 on 150 of Drishtee’s kiosks and 150 of n-Logue’s kiosks: Kiosk customers tend to be young, with 30% between the ages of 19-25 and another 35% between 26 and 35. Levels of education are spread roughly evenly across different levels of accomplishment, although those with less than 4 years of primary schooling and those with post-graduate degrees are rare. The predominant users of kiosks are students. In fact, in order to get a reasonable sample of other customers, our surveys were intentionally restricted to be delivered to a maximum of only two students (out of five respondents) per kiosk, and all kiosks easily saturated this quota. One interesting fact is that the gender of
- 123. 115 0.0 20.0 40.0 60.0 80.0 100.0 U lagapitcham patti Thiruvadavur KeelaiyurThaniyam angalam KidaripattiAllFive Villages Village %ofUserRespondents Male Female 0.0 20.0 40.0 60.0 80.0 U lagapitcham pattiThiruvadavur Keelaiyur Thaniyam angalam KidaripattiAllFive Villages Village %ofUserRespondents 0-9 yrs. 10-19 Yrs. 20-29yrs. >=30 Years 0.0 5.0 10.0 15.0 20.0 25.0 30.0 U lagapitcham patti Thiruvadavur KeelaiyurThaniyam angalam KidaripattiAllFive Villages Village Percentage Population Households 0.0 10.0 20.0 30.0 40.0 50.0 60.0 U lagapitcham pattiThiruvadavur Keelaiyur Thaniyam angalam KidaripattiAllFive VillagesVillage %ofUserRespondents < Rs. 500 Rs. 500-1000 Rs.1000-2500 Rs.2500-5000 >Rs. 5000 0.0 20.0 40.0 60.0 80.0 U lagapitcham pattiThiruvadavur Keelaiyur Thaniyam angalam Kidaripatti AllFive Villages Village %ofUserRespondents Illiterate School College Technical Diploma Professional (Engg./Medical/Law ) Other 0.0 20.0 40.0 60.0 80.0 100.0 U lagapitcham patti Thiruvadavur KeelaiyurThaniyam angalam KidaripattiAllFive Villages Village %ofUserRespondents Hindu Muslim Christian kiosk customers very consistently mirrors that of the operator. Overwhelmingly, more girls and women visit kiosks when the operator is female, and almost no women visit kiosks run by men. This is likely due to cultural barriers to men and women interacting in one-to-one outside of familial relationships. (Toyama and al, 2005, pp. 4-5) Note that a (*) indicates that the proportion of y users is significantly lower than that in the village population (Kumar and Best, 2006). Figure 39 - Gender of kiosk users (Kumar and Best, 2006, p. 6) Figure 62 - Age distribution of kiosk users (Kumar and Best, 2006, p. 6) Figure 38 - Overall reach of the kiosks within their communities (Kumar and Best, 2006, p. 5) Figure 42 - Income distribution of users (Kumar and Best, 2006, p. 9) Figure 41 – Educational level of kiosk users (Kumar and Best, 2006, p. 10) Figure 63 - Distribution of religions of kiosk users (Kumar and Best, 2006, p. 7)
- 124. 116 LACK OF ADEQUATEPARTNERSHIPS/SUPPORT FOR DELIVERY OF SERVICES N-Logue had developed several partnerships for delivery of services (G2C and B2C) and as Professor Maitrayee Mukerji (personal communication, December 16, 2014) and Professor Rajendra Kunar (personal communication, December 21, 2014) admitted, these partnerships did not really sustain, which caused n-Logue’s difficulty to reach financial sustainability. Steyn gives a good example in his book ICTs for Global Development and Sustainability about the issue encountered by n-Logue with partnerships: For example, partnerships with a private eye hospital at Madurai and with the Tamil Nadu Agricultural and Veterinary University had virtually ended by the end of 2004 and most of the kiosks (both Chirag and Dhan36 ) had stopped using these partnerships for delivery of services. […] the main reason for the failure of these partnerships was lack of incentives for these organizations to continue these partnerships. For example, the additional clientele that the private eye hospital had hoped to gain did not materialize as there was no regular follow up by the SARI project officials with these organizations on the services provided by them. This indicates that the partnerships need to work for the mutual benefit of both sides for them to be successful in the long-term. (Steyn, 2010, p. 342) DRIVERS OF FAILURE RATHER THAN DRIVERS OF SUSTAINABILITY Even though n-Logue was one of the pioneers in achieving ICT4D in rural India through the private and for-profit model, they have failed to remain sustainable in the sense they are no longer operational since 2007 (Satyan Mishra, personal communication, December 28, 2014). Therefore, I have been interested in asking why to my interviewees as I did not think a lot of secondary resources on the failure of that business model on the internet. Here below, you find the answers I have been provided by the interviewees who kindly gave me the reasons of n-Logue’s failure. Dr Maitrayee Mukerji exactly cited me the reasons as follows (personal communication, December 16, 2014): 1. The technology was not viable - Some say that the state (as in government) did not support in terms of policy, then there were other new telecom service providers, providing the same 36 ICT kiosk SARI project in which n-Logue partnered with an NGO (Dhan Foundation) and others.
- 125. 117 communication services atlower rate and better speed. There is no systematic study on this aspect. 2. The business model of n-Logue was closely coupled with the technology - kind of lock-in and the kiosk owners had to pay license fees with no steady stream of income from kiosks - so they opted out. 3. Like other similar initiatives e.g. Drishtee - it set up the kiosks just as a standalone venture and hoped that other institutions would provide the services - which could not happen.” 4. It represented a phase of TC movement in India that led the path to the next one and could not survive. 5. As concept, n-Logue is not the only one that could not survive, there were others and many of the private CSCs under the central government funded scheme face the same issue - however when reasons of success or failure are analyzed, they often revolve around low literacy, low skills, no policy, etc. But the fact is that they just don't fulfill the needs or address systemic issues. Furthermore, Professor Rajendra Kumar (personal communication, December 21, 2014) more deeply specified the third reason Dr Mukerki had pointed out above concerning the lack of service provided as most important cause of the failure: N-Logue was a pioneer in ICT4D initiatives in India. It was able to obtain institutional support from the government and other stakeholders and tried to create a sustainable ecosystem around G2C and B2C services through the telecenters. However, it failed to sustain as the G2C services ecosystem was not well developed due to lack of backend computerization in government offices. Even the B2C services were not well developed at that time in terms of their online availability. We can therefore converge on the assumption that the sustainability failure of n-Logue has been partly caused by the lack of institutional partnership for service delivery and the lack of institutional support for e-government services (Steyn, 2010, p. 345). Moreover, we can also mention the inability of n-Logue to adapt its business model or just the services provided over time to the rural communities according to their needs and preferences: n-Logue, as rural connectivity provider, just replicated or scaled its business model, thinking the rural entrepreneur could by itself make the adaptability to the rural ecosystem of its location environment and context. It simply failed.
- 126. 118 8.3.3 SWOT Figure 64- SWOT Analysis of n-Logue (Author, 2014)
- 127. 119 9. Case study3: Drishtee 9.1 Context of implementation Already in 2000, Drishtee, software and IT company, launched the first telecentre-based e- governance project (website) in rural India for Gyandoot37 by trying to improve government services for rural citizens in India, Madhya Pradesh, in partnership with the District Administration of Dhar (Bhatnagar, Dewan, Torres and Kanungo, 2003). Cyber Edge and the district administration of Dhar also implied Drishtee for developing an e- governance intranet project based on private-public partnership. The idea was that the kiosk database got updated when it was connected to the district server or the web server. On one side, the district server monitored and administered the kiosks and the district database. On the other side, the web server coordinated communication and performance between districts. It has been constituted by three operating parts: 1. The kiosk 2. The district server: local level content provider 3. The web server: national level content provider Drishtee collaborated on the project during about nine months, after taking over the management of the initiative and deciding to register as formal company to enter the market of ICT-enabled kiosks in rural India (Ibid., Parminder and Deepika, 2008) The Drishtee initiative was born and has therefore been launched in 2000 as a telecentre model in India. Partnerships with BCG have been conducted at that time in order to evaluate the existing models and develop and test others. Many similar projects have then started in the northern states of India. Rapidly, they undertook another e-governance project for the district collector of Sirsa in Haryana that time. The main issue Drishtee experienced with its two e-governance initiatives since its inception was that sufficient revenues were though to generate due to the fact there was a lack of acceptation from the district collector in the sense public employees were reticent to use the new way of delivering services. It conducted Drishtee to conclude e-governance services should no more 37 means “purveyor of knowledge” in English
- 128. 120 count as themain source of revenues for their ICT-enabled kiosk business model and other value- added services should be integrated to the bunch of provided services to the rural communities (Bhatnagar, Dewan, Torres and Kanungo, 2003; Parminder and Deepika, 2008). Therefore, the organization started with providing private services likely to generate more income. In that sense, Drishtee launched a next venture in Assam in 2003 with the aim at “[…] fulfilling needs that were common across different contexts” (Mukerji, 2013, p. 117). The new characteristic that stood out of the business model of Drishtee was its replicability, since the services provided by Drishtee could be henceforth implemented in different socio-economic contexts and e-governance services could also be deployed as long as partnerships with the public sector were made possible. One big challenge Drishtee succeeded very soon to overcome was the barrier of poor internet connectivity in rural India. Drishtee has been able to become a networked platform’s provider of private companies for serving the unreached. However, in 2006, Drishtee decided to change its business strategy from a telecentre-based model to a rural distribution network model, even though its business model was financially sustainable, because the company was not satisfied by the number of people reached in rural India. While the company generated enough revenues to sustain, only few people could reach these services (around 10% according to Satyan Mishra, personal communication, December 28, 2014). Nowadays, Drishtee remains sustainable, even though its business model is no longer focused on ICT; just few businesses use ICT like banking points, citizen civic centers, etc., but they do not gather anymore plenty of diverse services provided at the same place as it used to be in the telecentre-based model. The new kind of business scope and social desire of Drishtee is becoming the biggest rural distribution network in rural India by empowering and supporting its community eco-system.
- 129. 121 9.2 Business Model Vision:Envision a world where all communities are empowered to achieve shared prosperity Mission: Collaborate with marginal communities to develop and nurture rural enterprises and support the community eco-system. Type of private model: Franchise model Scope of Coverage: More than 1,132 telecentre-based kiosks38 in 2006 through 24 districts and 12 states of India (Mukerji, 2013, p. 117). More than 5,000 villages served in 2012 with the current business model which has been set up in 2006/2007 and counts on more than 14,000 kiosk entrepreneurs (Drishtee, 2014; Oxhip, 2014). Status: Operational; since 2006/2007, the business model changed from telecentre based to rural distribution network based. The telecentre-based business model Originally, the primary focus of the Drishtee business model was providing e-government services from villages to villages. It evolved as we said in the previous section into “[…] a network orchestrator with a mission to create and implement a sustainable, scalable platform for entrepreneurship to enable the development of rural economy and society through the use of ICT” (Mukerji, 2013, p. 117). From the very beginning, Drishtee aimed at “connecting India village by village” (Drishtee, 2005). Originally, it had been launched to provide e-government services to rural villages (e.g., birth 38 transformed into banking points and others since 2007 (Satyan Mishra, personal communication, December 28, 2014)
- 130. 122 certificate applications, vehiclelicensing, etc.). Rapidly, this ICT project took importance and its business model evolved. Step by step, partnerships have been concluded with banking and other industries in order to serve the needs of villages. The Drishtee value propositions are conveyed through a fee-based and ICT-enabled private service delivery channel based on a sustainable and replicable model. Drishtee set up and provided an ICT-enabled platform for delivering fee-based services in rural India, supported by private and public partners. More especially, the telecentre-based business model of Drishtee worked on franchising ICT kiosks providing the necessary hardware and the financial assistance through Drishtee’s web portal. The value propositions Drishtee wanted rural India benefits from its ICT-enabled kiosks were as follows: 1. Increase the per capita income 2. Reduce the cost of delivering services versus its conventional system 3. Streamline the allocation of villagers’ revenues for rural development The Drishtee business model could be structured into three parts: Drishtee, the Vistaar Block Channel Partner (VBCP) and Village Kiosks, even though either the VBCP operated the village kiosk or the local kiosk entrepreneur could take the responsibility of the channel partner (Bhatnagar, Dewan, Torres and Kanungo, 2003, Mukerji, 2013, pp. 116-120) 1. Drishtee had an head office at Noida and branch offices in the states it operated. 2. The Vistaar Block Channel Partner (district operator or hub owner) was the name by which Drishtee replicated its business model in rural India. The VBCP took care of the region in which Drishtee operated by identifying and understanding the local context of the rural area concerned. In that sense, the VBCP had to support Drishtee in providing logistics on site, finding potential entrepreneurs and executing marketing and sales, etc. 3. A Drishtee village kiosk entrepreneur operating in a location of generally more than 5,000 people. Market places or other gathering places in the village were preferred locations to set up the kiosk location. It was up to the kiosk owner and to decide, but it remained critical to the potential of the kiosk to generate revenues and be sustainable. The kiosk entrepreneur called Soochak owned and operated the kiosk, after being selected by the local community.
- 131. 123 Drishtee sought, identifiedand shortlisted possible candidates during a selection process calling a gramsabhaxxiv , even though the process depended more on the village context: newspapers could display job advertisements, people in charge of communication channels in village (teachers, fertilizer seller, etc.) could be approached or potential candidates could also be invited to meet with kiosk operators and Drishtee field representatives. The conditions to fulfill in order to apply for being an entrepreneur were the following ones (Bhatnagar, Dewan, Torres and Kanungo, 2003; Mukerji, 2013): formal education (10 years completed); written and oral English language; computer skills; and sales & marketing skills. However, as Drishtee encountered difficulty to judge on the last criterion, they decided to adapt its final selection process with its subscription system by making the deal that the candidate selling more subscription was the one finally selected to operate the kiosk. There were two main reasons that could explain that (Mukerji, 2013): 1. Lower difficulty to judge on the ability and efficiency of candidates before testing them 2. Higher motivation because of competition between the candidates to inform and convince citizen about the Drishtee kiosk (awareness and attraction) in order to conclude subscription (loyalty). The kiosk operator of the Vistaar Block Channel Partner (VBCP) was responsible for identifying the services to get provided fitting the best with the context of the village embedded in the requirement needs of its inhabitants. The selection and training of kiosk operators needed Drishtee to take time. Indeed, Drishtee was not going and investing anywhere no matter how; characteristics in the villages and operators have to be considered such as having a population greater than 5,000 villagers, 12-year-experienced and educated operators, etc. (Mukerji, 2013). After recruited, the kiosk entrepreneur was afforded a technology and marketing training at the district office of Drishtee. During this group training, the kiosk entrepreneur had the opportunity to network with the other kiosk entrepreneurs of the same district. The kiosk entrepreneur next took the ownership of the village kiosk. The kiosk was generally managed with help of family, relatives
- 132. 124 and paid staff(Ibid.). The kiosk entrepreneur took the responsibility of managing the village kiosk. He had to pay around Rs. 60,000 to be the kiosk owner. Once done, the revenues from the ICT- enabled kiosk were generated from kiosk operators (on average Rs. 5,000-6,000 per month), contributing directly to who had to pay a monthly fee and a per-transaction cost. The kiosk entrepreneur had two financial contributions to pay to Drishtee (Bhatnagar, Dewan, Torres and Kanungo, 2003): 1. the license fee of Rs. 10,000; 2. 20 percent of his commercial income. Drishtee provided different services like e-education, e-agriculture, e-health, insurance, e- government and e-commerce services. It was up to the kiosk owner who was the kiosk entrepreneur to decide what services were appropriate to get provided and when according to the immediate revenues they could generate and relatively to the needs and requirement of the village targeted. the The kiosk owners could also increase their revenues in selling non-ICT related products and services fast moving consumer goods (FMCGs). In that sense, the kiosks were really popular as place for rural retail needs in the village (Parminder and Deepika, 2008). The Drishtee kiosk at Kesarpurxxv (Uttar Pradesh, India), in the Research Study 4, had been formally registered in December 2004 in the name of a male entrepreneur belonging to the dominant Kurmi community/caste (traditional landowners and cultivators). He was well known in the village, so that it could help Drishtee for generating awareness. Mukerji (2013, p. 124) described the kiosk location as follows: The Patel Drishtee Soochna Kendra was located in a rental shop at the market and was adjacent to the telephone exchange, and the two bank branches. The main shop housed the computer and other equipment. The generator was kept inside the shop on the left. The shop on the right was the small classroom for the ‘theory’ classes. Other shops in the lane included a tailor shop, the welder and iron works man. A running verandah in front of the shops created a common space – people came and sat, waited for their turn, read newspaper and sometimes studied. Mukerji (2013, p. 124) explained that for instance in the Drishtee kiosk at Kesarpur (Uttar Pradesh), soil testing could be provided as an agriculture extension service by private fertilizer companies.
- 133. 125 The most popularservices were though digital passport photography (61 percent of use), digital photostat copies of applications and forms (41 percent of use) and checking examination results on the internet one or twice times in a year (27 percent of use). As the two most used services were offline services (passport photo and photostat) and e-government services (passport, bank account, loan, forms, applications, etc.) by low classes (especially for applying in welfare schemes) and by middle classes (especially for job applications), Internet or computer-related services were consequently not really requested by most of the socio-economic classes, except for accessing examination results and for computer education by people with higher education (more than 9-10 years). The reason why digital photo and photocopy were very appreciate was there were no shops in the surroundings of the village providing such services in order to help villagers for opening a bank account, for availing loans and for completing forms or applications. From telecentre-based to rural distribution network business model As Drishtee’s co-founder, Satyan Mishra (personal communication, December 28, 2014), told me during interview, they changed their business model from a telecentre-based to a rural distribution network model by “start[ing] from scratch” because they felt they lacked impact with a business model only focus on ICT: Our experience with ICT in villages has been mixed and we have been very grateful and very happy about the model that we pursued back in 2003-2004, which continued in 2006, it was not the fact it was not sustainable, it was clearly sustainable and we had a sustainable business plan to pursue and take the total numbers to 100’000 centers. The trouble actually was in terms of the impacts, I personally was not very sure about the deep impact which ICT can have in the village, because it was a kiosk, it was a great service in dealing points, but it was ineffective without a physical dashboard. What you could provide is information, what you could provide is perhaps some services, […], but it was difficult to run a very impactful business model only on the virtual platform; that was the reason why we chose to add more. I don’t think we abandoned the ICT business model, we stop to call ourselves as an ICT organization because I believe it was not the intent, it was not IT the ‘end’ we were pursuing, it was more the ‘means’ and not the ‘end’ […]
- 134. 126 More precisely, SatyanMishra (Ibid.) pointed out the motive which made Drishtee change its business model (studies on impact of Drishtee in villages), even though it was financially sustainable (investors came) and successful (Drishtee received plenty of awards) at that time, and the reason why they decided to start over from scratch: I think 2006 was the year, where lots of things happened, we got a lot of awards during this year, we got investments […] and it was also the year when we incurred some charges to spend time in the village and we could realize what we were providing had a leveraged impact, it was only the top 10-20% of the village population […]. We had not just started Drishtee to just develop a business model for assets, it was all about the impact and the community, and Drishtee realized that we were not creating that impact […]. We were all disappointed, we were very young, and did not want to kind of just scratch the surface, we really wanted to go deeper […] In 2006, they therefore decided to change the business model and the strategy itself. Satyan Mishra (Ibid.) explained me it was not an easy process and that it is still ongoing. He also told me they had helped the Government in designing the recommendations for the Common Service Centers (CSC’s) under its National e-Governance Plan (NeGP): We did relook at the strategy in 2006 and the actual changes started happening from there and continued until about 2009, because we realized what more we could do, because three years to build an internet business model of supply chain still had [been] very unstabilized and I would not say that it is as stable as the ICT business model we had earlier, but the ICT part of the business continues […] The Government started ICT itself, and looked at n- Logue model, Drishtee model, and we were part of government Committees which did recommend 100’000 [common service] centers across in India. However, I wanted to know why Drishtee decided to make that turnaround decision at that moment, when their business model was financially sustainable and had been awarded several time. Satyan Mishra (Ibid.) then answered me: I feel like it is the best time to look at the business model […] because what we are doing now is something which has taken a lot of time […] but stronger business model as compared to what we had earlier, […] turning away from a very successful future at that point, because now we are much more impactful. […] It was basically a kind of social
- 135. 127 question we hadto answer: do we continue to focus on our own business or on the business of the franchisees. We did kind of find that as a difficult question to answer, especially after investments that we had taken […]. Satayan Mishra (Ibid.) explained me next what the telecentres became with the new business model of Drishtee, which consist in several types of kiosks focused each one on one type of service. Some still need ICT for running, especially the banking points, which are operated in partnership with State Bank of India39 : Several of them are now banking points, these are IT-enabled, banking extensions of the largest bank in India, it’s a public bank, government owned bank which has its presence in villages, and, we, Drishtee’s ICT points have become extension points […] Furthermore, Satyan Mishra (Ibid.) confessed me the efforts for computer educations had been stopped for the following reason: We felt that computer education was basically taking the people away from the village. It was difficult to find a job in the village after computer education, so we have consciously decided to come out of it. It was a running business for us, it was really a painful decision, but it was really important for us, because […] looking at developing village like youth for its sustainability. […] We don’t want people to move out of the village […] Therefore, given that interview with Satyan Mishra but also the literature review done, I can conclude there is a real willingness at Drishtee to create an impact in rural India, not only serving people with services and products for generating revenues but by empowering them. This vision has been Drishtee is now operating on the basis of a rural distribution network and not any more as telecentre. They are still providing services for health, educatoin, banking, finance incusion, and has rural retail points and rural BPOs. ICT is not the main part of their business, except I would say for banking points and rural BPOs according to my skype interview with the founder, M. Satyan Mishra. As he told me during the skype call, banking points40 have been launched by Drishtee 39 http://www.drishtee.com/strategic-solutions/financial-inclusion/ 40 http://www.drishtee.com/partners/our-partners/
- 136. 128 through a partnershipin 2006 with State Bank of India, in order to provide banking services in rural India (last-mile banking network). The idea is to connect villagers with the bank through the kiosk entrepreneur which uses the technology as physical interfacefor the customer; it can enable villagers to open bank accounts, save money and make transactions. BPOs have just started to be a focus in the scope of businesses of Drishtee (pilot project has been successful with digitization services provided to the private and the public sector). Satyan Mishra told me he hoped a lot from this project as it is a real means according to him to keep the villagers working in the village, instead of empowering them for reaching the outcome they finally migrate to urban areas at the end and that rural areas always remain poor and marginalized. 9.3 Rural empowerment 9.3.1 Achievements PLANNING AND EVALUATION Drishtee did a lot to impact the rural communities the most efficient way they could. To reach their objectives of financial sustainability, they put in place several programmes/initiatives (Parminder and Deepika, 2008; Liyanage, 2009, Drishtee, 2014): Mission 6K: An institutional mission Drishtee decided to launch in order to ensure its kiosk entrepreneurs to be financially sustainable. Drishtee designed the bunch of services the kiosk entrepreneurs had to market in order to earn a sufficient revenue of US $124 (“6K” or 6,000 Rs. Ind.). The amount was based on estimations that covered operational expenditures, profit and salary: US $93 (Rs. 4,500) for the kiosk owner + a profit of US $31 (Rs. 1,500) for Drishtee = US $124 (Rs. 6,000) for the kiosk. ICT Segmentation Model: Planning tool developed by Drishtee in order to assess the viability of a business activity in a particular location for a telecentre they wanted to set up. The model proposed three variables: a) Rural dynamics, b) Rural economics, and c) Rural infrastructure. A scale from 0 to 10 for each variable permitted to evaluate any location on its socio-cultural and socio-economic characteristics.
- 137. 129 Rural ICTlifecycle: Impact assessment from selection of district to selection of the kiosk owner and the beginning of the operations. Drishtee for instance collaborated with the sarpanch41 of the panchayat42 to identify potential candidates to operate the kiosk. FINANCIAL SUSTAINABILITY OF DRISHTEE (FRANCHISING AGENCY) In 2006, they broke even and the next years they made money each time. ICT was an easier business even if does not impact that much. The distribution business is a very complex and challenging business, especially for a social enterprise like Drishtee with limited capital. Satyan Mishra said that he thought that from a future perspective they had taken the right decision to go from “only ICT” to “ICT plus the physical supply chain” even though Drishtee lost money for doing the turnaround. He considered the business stable for three years now, even if they did not grew a lot since (Satyan Mishra, personal communication, December 28, 2014). 41 The Sarpanch is the head of the panchayat. (Parminder and Deepika, 2008, p. 2) 42 The Panchayat is an administrative unit of the government at the village level. (Parminder and Deepika, 2008, p. 2) Figure 65 - Impact assessment (Drishtee, 2014)
- 138. 130 PHYSICAL HUMAN CAPACITYAS NECESSITY Drishtee, through its new business model, is using ICT as a tool, support and differentiator to its core activity, the rural distribution of services (goods and services). Satyan Mishra (personal communication, December 28, 2014) explained me what Drishtee had learnt with its experience and expertise was that “every franchisee is associated with a particular service” Villagers will take a lot of time to appreciate a service provided otherwise. If a franchisee has a franchise point on a specific service in the village, “then it will be easier and better for the community to understand and appreciate”. PHYSICAL CAPACITY AS NECESSITY AND ICT AS MEANS, ENABLER AND DIFFERENTIATOR Satyan Mishra (personal communication, December 28, 2014) explained me Drishtee, through its new business model, is using ICT as a tool, support and differentiator to its core activity, the rural distribution of services (goods and services): 1. great capacity building tool; it connects, makes aware and potential (new design, new lifestyles, etc.) (what Drishtee is doing already) 2. great organizational management information system (MIS) to know what they have earned, what they have spent, how good the business is and access loans which are very difficult to get for woman enterprises (where Drishtee has done a lot of work) 3. great platform to enable market access and penetration through e-commerce (where Drishtee has to do a lot of work) SOCIO-ECONOMIC EMPOWERMENT Drishtee provided an e-commerce platform called Drishteehaat, which was kind of marketplace, generally for rural artisan, generally women, in order to sell their products: www.drishteehaat.com (Liyanage, 2009). There was the posssibility to upload images and information about their the products, and the e-comemrce platform enabled the artisans to reach more people (worlwide web) and potentially to earn more money.
- 139. 131 Moreover, the younggeneration was really interested in the computer education programmes. Drishtee had launched a very famous programmme called Drishtee’s Centre for Education and Entrepreneurship Programme (CEEP) which helped to empower people, especially the youth of the village through computer literacy education Computer literacy training. They could also ask the kiosk operator questions for career councelling for instance. Self-help groups in agriculture could also be interested in the services provided and the information they could get through the kiosk with their relatives and friends. Information on crop prices could permit the famrers to know exactly when to sell; they were empowered since they knew the real value of their produce and were able to avoid corruped and unfair intermediaries (Bhatnagar, Dewan, Torres and Kanungo, 2003; Parminder and Deepika, 2008). 9.3.2 Critical issues SOCIO-CULTURAL AND SOCIO-ECONOMIC INCLUSION REGARDING THE TELECENTRE-BASED SERVICES OF THE FORMER BUSINESS MODEL OF DRISHTEE (RELATED TO A SPECIFIC RESEARCH STUDY FROM MAITRAYEE MUKERJI) The results and conclusions you find below have been established by Maitrayee Mukerji (2013, pp. 124-130) based on a specific research study. I use this section to comment them, in order to depict the socioeconomic and socio-cultural patterns of telecentre-based services that happened in a specific Drishtee kiosk. Mukerji observed during its fieldwork in 2006 (Research Study 5) on a sample of households users of the Drishtee Kiosk at Kesarpur (Uttar Pradesh), socio-economic patterns of use of the village. One of the first observations of Mukerji regarding socio-economic categories was that “[…] 46 households or around 70 percent had availed at least one service at the kiosk” but “[…] the usage pattern differed across services […] – low, low-middle, middle and high socio-economic status was 50, 67, 76 and 92 [percent of user households] respectively” (Mukerji, 2013, p. 125). According to the statistics gathered in the sample, the low socio-economic class counted the more people without any service availed at the information kiosk (Mukerji, 2013, p. 126): - 10 [of the total 20] households belonged to low socio-economic category. - 19 [of the total 20] households either did not own any land or owned less than 2.5 acres.
- 140. 132 The respective sizeof the farming activity also played a role: “The percentage of user households among landless was 50 and thereafter it was 68, 83, 100 and 100 for marginal, small, middle and big farmers respectively” (Mukerji, 2013, p. 126). In the same perspective, an asset index permitted to distribute the households regarding the number of assets they owned: “[…] the households with less assets access and use telecenters less than others” (Mukerji, 2013, p. 126). Maitrayee Mukerji (2013, pp. 124-133) also defined five important socio-economic variables to define the pattern of household use of the Drishtee Information Kiosk: the occupation, the caste, the religion, the education and the sexe: 1. Just before we spoke about the farming that remains the major occupation. All other kind of occupational categories used the services provided in the kiosk as they were useful, except carpenters, masons and drivers who were 73 percent (on the basis of 11 people in this category) without any services availed. Other occupation category (businessman, farmers, government and others) all had about more than 70 percent of user household, except the daily wage labour (55 percent of user household). 2. The castes were also an important indicator of the socio-economic status of a household user in the sense it determines whether a caste is forward (Forward Castes such as Brahmins, Pandits and Baniyas who counted to around 15 Hindi people in the village) or backward (Other Backward Castes engaged in Zari-relatedwork (generally tailoring, designing or embroidering), Schedule Castes, and still lower Castes). Castes were generally clustered between each others by “kuccha brick-laid lanes” in the village (Mukeri, 2013, p. 122), so that social interactions between them were very limited. Forward castes had the higher pecentage of usage compared to backward castes, even though only 3 househols had been selected in the sample (representativeness but non-significativeness for conclusions). 3. The religious communities were finally an important element of difference regarding segregation: “Comparatively, Hindus were more segregated in terms of caste and occupation” (Mukerji, 2013, p. 121). Only the Schedule caste among the three castes of the Hindus (General, OBC and SC) had a low percentage of kiosk users, while the only representative caste of the Muslims (OBC), mainly active in agriculture and embroidering, had a very low percentage of kiosk users (41 percent) compared to the same caste of the Hindus (90 percent). Mukerji explained it was related to the occupations of the two religious communities:
- 141. 133 Hindus were primarilyfarmers who availed agriculture loan from the bank or credit societies. To do so, they required passport size photo and photostat of documents; the two main services available at the Drishtee kiosk. On the other hand, Muslim households were primarily engaged in ‘Zari/Zardozi’ related work. The majority of them worked as ‘karigars’ or embroiders for the large business houses and did not necessarily avail loan from formal sources. (Mukerji, 2013, p. 127) 4. The educational status played an important role over generationsas on the percentage of user households: “As the educational status increased, there was an increase in the percentage of user households” (Mukerji, 2013, p. 127). Moreover, during the field research, when the households have been distributed according to the highest level of education in the family, graduates (12 people in the sample) and post-graduates (11 people in the sample) of households have been identified to be the only ones to use computer education services at the Drishtee Kiosk, with 50 percent (6 people) and 18 percent (2 people) of usage respectively for a total base of 8 users for that service (from 66 people in the sample). Graduates and post-graduates were the most important categories of users for examination results as well. 5. The gender was finally an important variable to take into account if we want to follow the principle of universal access in rural India: Women used very less the ICT-enabled kiosk, only for absolute necessity. As Maitrayee Mukerji concluded in her study, in Kesarpur, the gender, the caste and the religion were the three most important criteria to impact the difference in kiosk service use between the households. By the way, no caste was denied to access the ICT-enabled center, so that Maitrayee Mukerji concluded in that case study neither the caste nor the religion were considered as social barriers and consequently discriminated. She said the kioks played certainly a significant role by its location or the kind of services it provided (maybe more adapted to the castes’occupation such as soil testing services for instance). An important lesson we can get here from that specific case is ICT-enabled kiosks cannot solve up magically the divides in some contexts. Indeed, ICT even tends to increase the divides between the socio-economic and socio-cultural groups: Those who get access to ICT increase the digital divide compared to those who don’t (Tim Unwin, personnal communication, January 5, 2014).
- 142. 134 FINANCIAL SUSTAINABILITY OFTHE ENTREPRENEURS Satyan Mishra (personal communication, December 28, 2014) explained me the lack of control Drishtee had on the entrepreneurs with the franchise business model by the past: I can tell you for sure that 20 percent of our entrepreneurs at any point of time were not sustainable; It was not just the issue of the choice of the entrepreneur, but also the choice of the area and the geography, because all jobs have all not enough needs for ICT-enabled services. He further explained me the importance to focus on the generation of income, what Drishtee has done now with the new business model focused on the rural distribution network: It is important to provide income to the community and not just savings,which come out localizing services; income generation was very important, which we realize and we are focusing our rest of energy on. I also asked him what they did with the entrepreneurs to make them manage better the kiosks. He answered me about trainings and programme initiatives launched by Drishtee In 2003, we launched a programme called Mission 6K […] in which we ensured that every entrepreneur was capable of earning Rps. 6,000 per month out of Drishtee. This Mission 6K was also supported by World Bank, then they gave us an award it was for that particular Mission 6K, which we had. That programme led us to develop lots of services […] the core benchmark of judgment was on the basis of small fees that they were paying us on a monthly basis. It was called […] We encouraged them to keep time on how much they are earning. It was very clear to us based on the data that we used connect: How many of them are earning […] All the data was being tracked, and we could make an assumption. It was not like we would be absolutly accurate but we could make an assumption on how much they were earning. At least, there was a minimum earning they were having. It was a good indicator for us to know the income level of our entrepreneurs.
- 143. 135 REAL EMPOWERMENT EFFECTON THE RURAL COMMUNITIES As Satyan Mishra (personnal communication, December 28, 2014) told me, ITC-enabled kiosks are still very “powerful tools” as the entrepreneur can provide information and services to villagers. However, he also mentionned me during the interview the fact it is not enough to provide ICT; a physical network has to be built so that the franchise business model is holistic enough to serve at best the needs and requirements of the rural communities: The part we have taken is a more difficult part, we don’t want to stop at just the information, but would ensure that every village stands on its own feets. For that we have do a lot more than just develop virtual ICT networks. Therefore, we would try to have a very strong supply chain, a physical network along with the ICT network as a complement to each other. INFRASTRUCTURE Infrastructure always remains an issue (connectivity and electricity). It was more inherent to the telecentre-based business model Drishtee previously had. Now they have started since 2007 to integrate the physical layer (distribution supply chain), many businesses don’t rely anymore on ICT and there is therefore more reliability in the services provided and trust in Drishtee’s kiosk entrepreneurs as villagers directly make business with them (retail points) or come for healthcare for instance (women’s empowerment programme where women are trained to assist villagers on the health issues they have).
- 144. 136 9.3.3 SWOT (onthe telecentre-based model of Drishtee) Figure 66 - SWOT Analysis of the telecentre-based initiative from Drishtee (Author, 2014)
- 145. 137 10. Discussion The casesI have presented work on the basis of business models generating economic profit for the agency it stems from and delivering social empowerment for the community it serves. They are operated through the private and for-profit model and pretend to make social business. I have been able to identify their main features through my readings and the interviews conducted: 1. They are launched, supervised, coordinated and driven by central agencies, either private enterprises (n-Logue and Drishtee) or ventures (ITC e-Choupal), which design the business model at scale, generally by themselves (top-down approach), to be replicated as easily and quickly as possible. 2. They are operated by private entrepreneurs, which have the responsibility for managing by themselves the village kiosk and for playing the role of intermediary for the agency it serves, so that the local performance of the business model partly depends on their own capability to drive the business; 3. They combine economic and social goals by trying to answer a socio-economic context, even though the economic goals are the priority in order to guarantee financial sustainability of the business model; By gaining access to telecom and Internet services through an ICT-enabled kiosk, it is therefore to logically admit the rural areas should get socio-economic benefits from the information and knowledge ICT provides them. They should be definitely empowered and their quality of life as well. However, even though positive observations can be done at certain points regarding the private and for-profit model of ICT-enabled kiosks, several common critical issues can be raised, too. 10.1 Digital divide One of the first questions I asked myself when starting this Master thesis was whether ICT initiatives, especially ICT-enabled kiosks, could bridge the digital divide between rural and urban areas in India. I had thought ICT could help in alleviating digital divide in the sense it could provide
- 146. 138 access and useto ICT in a shared-access facility to villagers. In that sense, I found out in my literature review authors depicting the advent of ICT-enabled initiatives in villages as bridging institutional gaps, as for e-government and commercial services for instance: “ In many cases, a kiosk not only brings the first PC to a village, but the first tangible presence of state government or local enterprise.” (Toyama and al, 2004, p. 6) However, during my literature review, I also read several authors mitigating the impact of ICT- enabled initiatives in bridging digital divide, among them I picked up an interesting quote from Rajindra Ariyabandu in his paper Role of Telecentres as Knowledge Networks: Successes and Challenges, which reported the efforts embodied in ICT4D initiatives had not really been that successful in reaching the unreached and bridging the digital divide: Conceptually, telecentres should be accessible and affordable to those who are marginalized and unable to afford the facility individually. At present the differential adoption of the Internet facility has created a digital divide within nations and between the developed and developing nations. Provision of telecentres is expected to bridge this gap. However, only a fraction of the poor have access to telecentres in the efforts to reduce the digital divide (Rogers and Shukla, 2001). According to the International Telecommunication Union (ITU), the magnitude of the digital divide has remained unchanged from 2002 to 2007, in spite of significant improvement in ICT development among the developing nations (ITU 2009). (Ariyabandu, 2009, p. 2) I decided hence to ask some of my interviewees the question as well, in order to get their feedback whether ICT-enabled initiatives could bridge the gap or not. They all converged on the idea that ICT initiative could not bridge digital divide by itself, but it could as enabler or facilitator. Maitrayee Mukerki first answered that question by telling me ICT is not the “end” for bridging digital divide but that other critical factors have to be taken into consideration: I don’t think ICTs as tools can alleviate the gaps – all of which are more systemic in issues – policies, institutional structures, capabilities, opportunities etc. ICTs can help only when the first level conditions are available. For example ICTs enhance learning in rural schools only when the basic infrastructure is in place. (Maitrayee Mukerji, personal communication, December 17, 2014)
- 147. 139 Jai Asundi nextargued positively on the role ICT could play as facilitator by underlining the importance of wide access and appropriate content in addressing the people: ICT is the only way given the vastness of India and the lack of resources to bridge it in any of the traditional ways. In many cases the divide is due to lack of access and appropriate exposure. Once that hurdle is overcome the divide will be easier to overcome. (Jai Asundi, personal communication, December 21, 2014) Tim Unwin finally raised that same processes cause the differences between towns and countryside and difference of connectivity, and explained me that digital divide could in some ways be crossed and bridged by development initiatives. Regarding the capacity of ICT to bridge by itself inequalities and divides, Professor Unwin stated like the other interviewees: ICT is an accelerator. […] All the evidences say that it increases rather than reduces [the divisions] […]. The differences between men and women have been [for example] a bit more significant. […] ICT still have potential to change things, but let by itself ICT increases the inequalities. (Tim Unwin, personal communication, January 5, 2015) 10.2 Socio-cultural and socio-economic empowerment It was amazing to learn during my work that plenty of ICT initiatives (national, regional and local) had been implemented since 1990’s in different regions of India in terms of e-agriculture, e-health, e-education, e-governance, etc. by different types of agency (public sector, private sector, civil society organizations and private-public partnerships) and had led to different outcomes in terms of socio-economic empowerment. A knowledge community can emerge from the access, use and share of information and knowledge between villagers for answering contextual issues related to their local ecosystem. Villagers can especially learn in areas they are concerned about: agriculture, health, education, etc. and ICT can in that case empower the less informed and educated. It is especially the opportunity to get in touch with the knowledge world that mainly interest the young generation (main users).
- 148. 140 The kiosks havehence the important mission to open the world of knowledge economy to large number of poor and disadvantaged people who could not get access to ICT individually and facilitate their access to services: In many cases, a kiosk brings to the villager information that once was practically unavailable, and services that took days of costly travel are now within biking. One study43 showed that each kiosk typically saves a village $15,000 annually in costs of trips into town and lost wages. (Toyama and al, 2004, pp. 4- 5) Moreover, resulting from the ICT4D movement and transformational discourse of the 2000’s, they have been considered as “tools” for empowering the poorest people, the women and other minorities which were excluded from the knowledge society before the kiosk implementation because of the existing divides in India between areas, gender, castes, socio-economic classes and literate/non-literate people As Maitrayee Mukerji mentioned, on the basis of her literature review taking into account the patterns of access and use (Dossani, Jhaveri and Misra, 2005; Pal, 2007; Tiwari, 2008, cited by Mukerji, 2013, p. 50), the socio-economic impacts resulting from telecenters at any location have however been limited. As Mukerji then explained: A general observation is that it is difficult to establish the causal link between provision of technology, information and services to specific socio-economic indicators. (Mukerji, 2013, p .50) Based on four types of indicators (venue performance and sustainability, users, usage patterns and downstream impacts), Sey and Fellows (2009) concluded similarly to a limited and elusive evidence on downstream impacts and noted the difficulty to identify and measure the impact of the public access ICT model. Similarly, Tim Unwin (personal communication, January 5, 2015) told me during the interview that “there is no consistent mechanism for evaluating success […] Judging success is challenging.” We have therefore to keep in mind no best practice does exist. 43 Based on a 2004 study by Digital Partners and Intel that polled 30 kiosks in three states with village populations averaging 5000 residents. Source: Toyama and al, 2004, p. 5
- 149. 141 The promise ofrural empowerment envisioned by ICT4D has therefore not been always possible depending on the way the business model of the ICT-enabled initiative was designed and implemented by the network agency, managed by the kiosk entrepreneur and supported by stakeholder partnerships, but in some cases, however, initiatives really empowered disadvantaged groups at certain extends (i.e. e-governance project, e-literacy initiative) as Rajindra Ariyabandu underlined: Telecentre networks have taken the social responsibility of empowering rural women. In an inclusive Indian society, women are suppressed in the public domain. Role of the telecentre network and the involvement of the government have created a space for women to be active partners in the new information society. In Kerala, participation of women in the e-literacy programme has increased due to the confidence built by the state and the telecentre network. (Ariyabandu, 2009, p. 17) The empowerment could also be for women the result of taking the opportunity of the kiosk management, in order to enhance her inclusiveness in the knowledge society as female and attract other women in the kiosk for them to be empowered as well: Many kiosk operators are women, and for them, the kiosk represents an empowering livelihood outside of traditional village roles. (Toyama and al, 2004, p. 6) Regarding now the possibility to have a private agency running a business exclusively focused on social development goals rather than on business goals, Professor Unwin answered me as follows: I can come close to arguing that actually, it’s almost impossible for the private sector [by itself] to deliver solutions in rural areas, because that is the private sector that is causing the differences between rural and urban areas in the first place. (Tim Unwin, personal communication, December 5, 2014) Therefore, if ICT only serves the business model for private and economic interests, it does not make any sense for socio-economic development of “trickle-down” communities. I really think this could be the case of ITC Limited which is owned by corporate shareholders whose main interest is return on investments (ROI). In the case of Drishtee, I am personally convinced after my literature review and the interviews conducted, it is truly a social enterprise: it is not looking for maximizing
- 150. 142 profit but ratherfor maximizing empowerment impact, even though they take into account financials to remain operationally sustainable over time. 10.3 Scalability Regarding scalability, Professor Unwin told me most of the initiatives are designed and run for some village as pilot project, and that they then do not work for thousands as they are not designed at scale. He explained me that as follows: “You actually have to design a solution at scale […] You have got to deliver to one thousands, how are we going to do it?” (Tim Unwin, personal communication, January 5, 2015) However, I asked myself whether the franchise model was the adequate model for scaling a business model. Satyan Mishra (personal communication, December 28, 2014) told me he believed “franchising business is perhaps something which all of us have learnt out of ICT, it has been a great gift of ICT to all social organizations.” He continued by arguing “franchising in villages is perhaps the only way you can make a business model sustainable” and finally told me franchising was the key to scalability of Drishtee: “We are still completely focused on the franchising business; Whatever can be franchised, can be scaled, that is the mantra that we have.” Therefore, during the interview with Professor Unwin, I asked him if the franchise model was the best model according to his expertise to scale a business in rural India. He logically and simply answered me he didn’t like “best” and “to scale” but that “good practices” in default of “best practice” could be helpful for designing initiatives: There are a lot of good models and good practices that people can learn from and design the practice that works best, if you like, in their own context […] We should have good practices that people could draw up. (Tim Unwin, personal communication, December 5, 2014) C.K. Prahalad, Professor in Corporate Strategy, raised the same observation in the foreword of the book Making the Connection: Scaling telecenters for development (Fillip and Foote, 2007) by enlightening the importance to consider the business environment first:
- 151. 143 There is no“correct” way to implement a telecenter, no single “best” business model, and no “perfect” combination of features. Each environment is different, and the local players need to know their audience, determine their objectives, and seize the opportunities that best match local conditions—this is “consumer-centric” design at its best. We can call this Co Creation of solutions where the consumers (the poor) have a significant say in developing the solution. (Fillip and Foote, 2007, foreword II) In conclusion, scalability is essential if any business model envisions a wide impact, but we should however not forget there are two dimensions possible: quantitative scale-up and qualitative/contextual scale-up. It makes no sense to scale the same business model’s features everywhere, thinking it will replicate the same outcomes: quantitative scale-up. It will definitely not take into account that different contexts need different answers (see section on value propositions). This observation indeed makes total sense compared to the lessons learnt through the cases and the literature review previously explored. There is definitely not a best practice or a business model to be followed and applied everywhere in the same way. The local context remains particularly important, especially in India where the socio-cultural and socio-economic features differ very much dependently on the caste, the gender, the socio-economic status, the location (urban/rural and State) and policy. 10.4 Sustainability The sustainability question is a very tricky question to answer. What really means sustainability? It means looking for the ways of delivering right and adapted ICT services cheaply and effectively at the village level and on the long run. More especially, it says that “development efforts should be economically or commercially self-sustaining eventually, and that preferably they should be made sustainable through some kind of market mechanism [...] [so that] IT should be promoted with as limited an intervention as possible to overcome barriers that were keeping a market from developing on its own.” (Kendall and Singh, 2006, p. 2) However, most studies have shown that low income environments encounter a critical challenge to offer the adequate environment for commercial services to take place (Sey and Fellows, 2009).
- 152. 144 Professor Jai Asundi(personal communication, December 14, 2014) answered me there were like four principles, which I also found out through my literature review, which needed to be achieved in order to make an ICT-enabled project sustainable: 1. Involve the community in their establishment; 2. Build capacity within the community to maintain the infrastructure; 3. Have champions within (and outside) the community to make it successful; 4. Treat each region or area separately - success factors in different regions will be different. Here below, you can find how Harsha Liyanage (2009), ICT4D sector expert, classified the success factors, which could help make an ICT-enabled initiative successful. 10.4.1 Financial sustainability If it is very important to consider first the financial sustainability from the very outset of the kiosk's implementation in order to test viability of services and evaluate the business model’s sustainability. Studies have concluded the financial sustainability is associated with different factors: good management, good locations, strong local demand, new service development, locally relevant services, external linkages and networking (Benjamin, 2001; Etta and Parvyn-Wamahiu, 2003; Latchem and Walker, 2001; Colle and Roman, 2002, cited by Sey and Fellows, 2009). Figure 67 - Factors contributing to telecentre sustainability (Liyanage, 2009, p. 53) Figure 68 - Mapping the reasons for non- sustainability (Liyanage, 2009, p. 26)
- 153. 145 As most ofthe times villagers have low affordability, the shared-access facility or ICT-enabled kiosk is the best way to share the costs resulting from the access and use of ICT with their community: The globally accepted concept for sustainability of telecentres appears to be that the users should share the cost of telecom infrastructure and local facilities to provide a service to the community at an affordable cost and become commercially viable. (Ariyabandu, 2009, p. 2) In the three case studies I went through in the previous sections, it is obvious that there is a huge need of financial sustainability in order to replicate the model among rural India and to preserve the already-existing kiosks. Nevertheless, if there are not enough users regularly coming in the kiosk and generating revenues, the kiosk entrepreneur cannot break even and cannot remain financially sustainable. The principle to preserve the financial sustainability consists therefore to at least cover the operating costs of the business model and to generate a sufficient yield to the entrepreneur in charge of running the franchised kiosk. As raised by Kendall and Singh (2006), learning effects also play a significant impact on the financial sustainability of the private and for-profit business model of ICT-enabled kiosks. It is the reason why for instance n-Logue had decided to set up a phased cost approach for kiosk operators, in order to offer them a dedicated period to afford the operating costs while learning the business model management. However, it remains particularly difficult to break even for a kiosk entrepreneur. In that sense, the Research Study 6 had found out some interesting observations which consisted to say that on average a kiosk operator was not sustainable: Most critical for those interested in kiosk sustainability, average monthly income at kiosks remains low, with both mean and median at approximately Rs. 2000 per month, and this is below the target break-even income desired by either company (between Rs. 3000 and 5000, depending on terms of the loan, cost of connectivity, and the initial capital expenditure on hardware). This data is consistent with that observed in other studies (Dhawan, 2004; Srinivasan, 2004). (Toyama, Kiri, Menon, Pal, Sethi and Srinivasan, 2005, pp. 5-6)
- 154. 146 10.4.2 Value propositions TheICT-enabled initiatives from the private and for-profit model that had succeeded since the 2000’s were those where local people were adequately addressed since they had participated to the design of the initiative (co-creation). The initiative could understand the needs and answer them at best and villagers could in turn avail the value propositions desired. It is the “bottom-up” strategy. ITC e-Choupal evolved in that sense from a “top-down” approach with e-Choupal 1.0 to a “bottom- up” approach with e-Choupal 3.0 and Drishtee changed its business model to have a greater impact on the rural communities as Satyan Mishra, its historic founder, told me during the interview (personal communication, December 28, 2014). The generation of profit stems from the delivery of ICT services and development assistance that stand as value propositions: agriculture, health, education, banking and government services. The principle is to provide useful and helpful services in return for fees, while considering the socio- economic capability of the bottom of the pyramid. If there is absence of utility for the community to use the services provided, the usage will subsequently be low and the profitability of the kiosk will not guarantee its sustainability. People are ready to pay in order to get valuable information and ready to exploit the opportunity to get knowledge from services if the see any opportunity. It is still more critical to assure the viability of the business model of any ICT initiative targeting rural areas like India. A large and disadvantaged community (BOP) should ideally be addressed and proposed multiple services and products delivery that create value and are affordable. The assessment of needs and local issues should therefore be pursued through surveys and discussions with the population in rural areas, in order to be able: 1. to understand which ICT initiative will benefit to which needs; 2. to sustain the initiative with efficient and adequate value propositions over time. Here, I stress it is very important to understand ICT benefits can only be effective whether they provide value and offer a sustainable value for both the user and the provider. Gunasekera and Miranda (cited by Grimshaw and Kala, 2011, p. 141) mention research studies have defined elements of sustainable business models:
- 155. 147 The marketabilityof information services can be improved and diversified (e.g. market information, advising information, weather information, etc.); The offer-driven approach can be changed and address the villagers collectively instead of individually (e.g. membership fee, indirect revenue generation, etc.); The partnership with an existing local business or social organization helps in developing a viable business model to serve villagers with new services. The value proposition should therefore be customer-oriented and locally driven depending on the socio-cultural and socio-economic context of the community targeted; so that the services provided by the kiosks have to be aligned to the rural needs and demand. Contextual issues play here a significant impact on the successfulness of the private and for-profit model from implementation to replication. Business opportunity is related to local demand. It is therefore necessary to take enough time before franchising the business model. This “bottom up” and “demand-driven” approach is in preference the best way to foster rural development, as it answers at best the right and specific needs according to the rural village in which the kiosk is located and reflects the community’s willingness to pay the services provided by the kiosk. It means identifying the existing opportunities within the communities and translating them into co-created solutions which implied them to participate in the design process: Since communities are the closest to grassroots’ problems, they are the best judge to evaluate technology alternatives and provide innovative solutions for the problems of their respective areas. (Malhotra, Chariar, Das and Ilavarasan, p. 219) The ability to use ICT is therefore better if a “bottom-up” approach instead of a “top-down” approach is used. It is exactly what ITC learnt with e-Choupal as argued Prahalad and Krishnan (2011, p. 14): “The services and solutions offered had to be what the village needed rather than what ITC believed would be good for that particular village.” Satyan Mishra (personal communication, December 28, 2014) clearly agreed with that observation by telling me that he thought “ITC e-Choupal had a better business model at that time [than Drishtee] because it was not just about providing information, it was also about sourcing products.” During the interview, Professor Unwin (personal communication, January 5, 2015) explained me how much it was important and critical for success to involve the local people in the design process
- 156. 148 of the ICT-enabledinitiative since those communities are the best to identify what they need the most and would then have willingness to pay for: You have to involve the intended recipients in the design programme. These programmes should not be designed like in developed countries, without knowing the local problem encountered and how solutions could answer them. You have to live in the village and understand the context. It would be kind of product learning. […] It’s a mantra approach. […] Poor people know more than [ICT-enabled initiators] do about what being poor is like and what they need. So I think that it’s absolutely essential [to understand]. […] Poor people will pay to something that they think is a value. There you need incentives for the private sector to develop them. It could be subsidized. In that sense, as Dossani, Misra and Jhaveri (2004, p. 4) underlined, “community-based organizations understand user needs the best and are also the best-organized to provide it.” Therefore, they should be included in the process of co-creation of the private and for-profit operator. Finally, some evidence confirmed the reason why a service for development purposes is used by villagers. In that sense, adequately and consistently addressed value propositions encountered a higher chance to succeed (Sey and Fellows, 2009, p. 9): While Menon et al (2006) found that e-government, veterinary and healthcare services constituted less than 10% of the use of rural PC kiosks in India, they also concluded that use of such services is high at locations where they are offered consistently. 10.4.3 Partnerships and regulation Government services can also be supported by the ICT-enabled kiosks. As a result, the kiosks can serve as points of contact because they act as intermediaries in the relationship between the government and the citizen. Thus, e-government services can complement the bunch of services provided by the kiosk and play the key role of “pump-primer” for regularly attracting people to the kiosk.
- 157. 149 The private andcommercial model tends to have limited social impacts as seen previously because of priority focus given to commercial services. It is very tough to both target the social sustainability and the financial sustainability. Therefore, private sector models can benefit from public involvement in their ICT projects, in order to build their capacity (e.g. cost sharing, development of content providers, local content, etc.) and impact (in terms of customer service and suited marketing) related to the needs of the villagers. A good example is here the Akshaya centers in Kerala: “[…] Each took on approximately 1,000 learners and collected the equivalent of US$3.26 per learner for providing a basic computer course developed by the state’s IT mission” (World Bank, 2009, p. 24). It resulted from the situation that “[…] the local government covered part of the cost (US$2.79), as did the learners (US$0.47) [and] in about a year, the private entrepreneurs had recovered their initial investment” (World Bank, 2009, p. 24). Private public partnerships (PPP) have then to be considered, in order to reinforce the sustainability of the business models. As the private sector is more focused on the innovation and the operations by nature in order to assure the financial sustainability of the kiosk, the public sector should bear an important part of the responsibility in the social development role of the kiosk for the goodness of the rural community. Empirical evidence has also proved it is not a good idea to exclusively dedicate the funding of telecenters to the public sector as they offer “not a good sustainability formula, financially or politically” (Colle and Roman, 2002, cited by Harris, Kumar and Balaji, 2003, p. 9). According to Professor Unwin, the umbrella agency in multi-stakeholder partnerships should however be the public sector “[…] because the public sector the only sector that theoretically serves the interests of all people”. It is currently for instance kind of embodied into CSC’s in rural India now. Synergies and partnerships can in that sense be developed in order to scale-up ICT in rural Figure 69 - Dimensions of telecentre sustainability: input-output definitions (Masiero, 2011)
- 158. 150 India: Common ServiceCenters (CSCs) which are nowadays more than one hundred thousand centers throughout India. However, it is critical to keep in mind the social impact of the ICT-based e-governance project and not prioritarily focus on financial revenues. The private participation has then to be evaluated and defined before the e-services to be launched. In a more and more globalized world where multinational companies are on the playground of the development, the private sector initiates ICT projects as long as business opportunities exist. It was the case of ITC when the launched e- Choupal. Moreover, the commitment of the public sector can vary related to the state where the ICT initiative stands out. Andhra Pradesh is, for instance, one of the leading Indian states for private- public partnerships e-governance based initiatives. It supports its rural communities through e- governance with the ICT-enabled initiative Mee Seva. 10.4.4 Technical capacity Technical capacity or infrastructure is a critical and a first step condition to the implementation of any ICT initiatives in rural areas. Facilities such as energy power systems, connectivity systems (like the connectivity model of n-Logue) and computer related materials constitute an important input for enabling availability in remote and rural areas and consequently access to information. However, rural India still depends on undependable connectivity and electric power infrastructure and on limited hours of use. ICT-enabled initiatives can drive development of infrastructures for connectivity and electricity to villages and also play through e-commerce procurement channels a serious alternative to rural-to- urban journeys of villagers when they want to get informed or make transactions (Oestmann & Dymond, 2001, cited by Mukerji, 2013, p. 5). Here, we can for instance take the example of ITC e- Choupal which enables farmers to avoid traveling in order to sell their crops, in plus of providing them with an infrastructure equipped with connectivity and electricity: the e-Choupal centers. Providing broadband in rural areas is however a huge challenge which could overcome many others as Professor Unwin underlined: “Once you have got connectivity, actually the device you have
- 159. 151 doesn’t matter.” (TimUnwin, personal communication, January 5, 2015) Moreover, frugal innovation is also necessary to optimize for instance the energy demands of ICTs and in turn increase the affordability of the energy cost in rural areas. They have to be complement with regulations, in order to ensure appropriate tariff structures in rural India and then provide universal access. However, it is tough to enable affordable solutions in rural and remote areas “[…] where usage rates are low and therefore service provision unprofitable.” (Unwin, 2009, p. 366) For instance, the corDECT wireless technology developed locally by the ITT, Chennai, and not imported as it used to be the case by the past, pushed down the cost of the connectivity model of n- Logue. As we previously explained, this technology allowed n-Logue to provide local ICT computing adapted to the context of India by answering the problems of remoteness, the lack of infrastructure and the cost of technology in rural areas. 10.4.5 Kiosk entrepreneur capacity The kiosk entrepreneur capacity is another critical factor for the sustainability of the private and for- profit model based on pc kiosks. It is essential to set up employment and training practices in order to sustain staff capability for running the pc kiosk in the right way on the long run. Efforts of the kiosk entrepreneur can contribute to foster social inclusion (Toyama and al, 2004, p. 6). Entrepreneurial skills for sales and marketing are furthermore important for the kiosk entrepreneur in order to efficiently be able to manage and market the bunch of services provided to the villagers. Research Study 6 underlined the fact kiosk customers enlightened more than on average bad kiosk operator’s performance: 70% of kiosk customers report that the kiosk operator handles all transactions on the computer, and that they remain unable to use a computer. (Toyama and al., 2005, p. 5) Furthermore, based on their empirical study, Kendall and Singh (2006) showed other socio-cultural factors also played a significant role in the success of a village kiosk. Particularly, it has been enlightened the caste designation of the kiosk operator did significantly impact on profits in function of the local social norms and practices in effect in the region. On the opposite, selection
- 160. 152 process and trainingof the village-level entrepreneurs could counter some challenges such as gender bias as the authors said. Therefore it remains very important to consider an adequate business model which overcomes these diverse issues. 10.4.6 Awareness, capacity and affordability of the BOP Capacity of the villager is finally very important as well. However, rural communities, as we pointed out in this work are not always able to be aware of the advantages they could retrieve from accessing ICT and they are also often not able to use them. It has been proved that for ICT initiatives where training had been incorporated, the rate and speed of adoption of the ICT use were higher (Gunasekera and Miranda, cited by Grimshaw and Kala, 2011). Awareness is the first step to overcome. The kiosk entrepreneur capacity can permit to raise awareness of the villagers about the ICT-enabled kiosk and the bunch of value-added services provided. Research Study 6 showed that social networks can be a powerful driver: Kiosk marketing appears most effective through word of mouth, with over 60% of respondents having chosen to make their first visit to a kiosk based on hearing from friends and family. As most kiosk operators make some effort to market services to their communities through village assemblies or through pamphlets, so this reflects theories of diffusion of innovation that emphasize the importance of personal networks in technology adoption. […] (Colle and Roman, 2001, cited by Toyama, Kiri, Menon, Pal, Sethi and Srinivasan, 2005, p. 5) The ability to understand and use ICT is nevertheless better if the people understand and appreciate the value from using the technology for needs and requirements which concern them in priority. This is what ITC learned with e-Choupal as argued Prahalad and Krishnan (2011, p. 14): One of the lessons ITC had learned from e-Choupal 1.0 was that adoption was quicker when the value creation opportunity was clearer to the farmers. This was based on the premise that people’s intuitive ability to use technology is very different if they understand and appreciate the value from the use of new technology. Therefore, ITC first focused on
- 161. 153 demonstrating the valueof the mobile business model, and then rolled out the mobile technology platform. […] Affordability of the villagers certainly remains the most important criterion to impact the sustainability of an ICT-enabled kiosk. The Microsoft’s review of research on pc kiosks (2007) showed the economic viability is difficult since the kiosk services (pay-per-transaction or pay-per- use) are often overcharged compared to the willingness-to-pay for them.
- 162. 154 11. Conclusion We cansay that the private and for-profit model of ICT-enabled kiosks can offer digital solutions to rural and remote areas of India by providing access to their marginalized communities and feeding them with information and communication technologies. It permits to decrease the isolation of these communities to the worldwide web and opens the relationships between them and the outside world notably through commercial services (B2C2B) and e-government services (G2C2G). ICT-enabled kiosks can in that sense help them by kind of e-inclusion to substitute the lack of infrastructures and institutions in remote and rural areas, and they may in some ways enable social inclusion, regardless of caste, gender or socio-economic situation. Even though research studies show a large part of telecenter initiatives have generally got limited empowering impacts on the rural communities, we pointed out that the value propositions of the business model, the multi-stakeholder partnerships of the network agency and especially the human capacity of the kiosk entrepreneur integrating the whole community could overcome certain barriers, both for the sustainability and the rural empowerment of the initiative. The question was hence to know whether the telecenter initiatives had to follow some guidelines. It goes back to the question of success criteria of an ICT-enabled initiative I asked Tim Unwin about during my interview with him. He answered me the criteria any designer of ICT-enabled initiative should pay attention were essentially political, social, cultural and economic criteria; and that connectivity and electricity should be considered in priority, since ICT-enabled initiatives don’t exist reliably or fail before they started “if you don’t have the basic infrastructure at the first place […].” (Tim Unwin, personal communication, January 5, 2015) Based on my literature review, the interview conducted and the three cases studied, I have consequently been able to answer the question and identify the success criteria of the private and for-profit model of ICT-enabled kiosks: 1. Field analysis: Identify and understand the socio-economic and socio-cultural context. 2. Infrastructure: Assure connectivity and electricity are available. 3. ICT policy: Leverage the public sector to be a facilitator or to implement ICT-D policies and partnerships (e-governance)
- 163. 155 4. Innovation: Providerobust ICT technology solutions (connectivity, hardware and software) and ICT-enabled services to remote and rural areas at contextual conditions (e.g. remote distance for connectivity signal, low usage, illiteracy, etc.) and at cost-effective and affordable price through cost-effective frugal innovation, otherwise it is not possible to build a user base at all. 5. Location: Shared-access facility location matters since kiosk usage can be positively impacted whether the location is near a gathering place within the village for instance. 6. Local involvement and participation of the local community: Villager should be involved in designing the initiative (co-creation) according a “bottom-up approach”. 7. Adequate value propositions (supply driven inputs and demand-side constraints): simple, complete, appropriate, customized and affordable value propositions according to the opportunities identified. 8. Scalability in terms of design and implementation: Any business model, whether it is not scalable, will never impact enough people and get any wide impact in rural India which counts more than half a million villages. An orchestrating agency should therefore network the ICT-enabled kiosks or franchisees. It is in that case essential to have a common model within the network for sharing information and knowledge. 9. Stakeholder Partnership: The business model should consider partnerships with the civil society, the public sector and others such as business partners, NGOs, etc. for ensuring the ecosystem sustainability, otherwise it is difficult to scale and even sustain if no tier support is provided for technology and services. 10. Evaluation: Maintaining monitoring and evaluation to improve the impact. The final lesson I can learn from this work is that it is not the supply driven inputs from the private and for-profit model that make a business model financially sustainable or not. A fulfillment of several factors as previously explained in the discussion section and above-mentioned: capability of the kiosk entrepreneur, added-value and affordability of services, policy environment, efficiency of the management system, and the innovation and the cost of the connectivity system and infrastructure. Moreover, it is not that easy to prevent the failure of a business model due to misjudged socio- economic context or due to bad strategic decisions and to substitute the existing processes. It is in
- 164. 156 plus very hardfor a kiosk to have a village-wide impact and benefit everybody. Only services that concern most of the villagers can attract them in the ICT-enabled kiosk as long as it is affordable and they have the capacity to understand the service to interact with and use it (local language). The case of n-Logue failed for this latter reason: It was not able to provide enough adequate and valuable services, in order to enable its financial sustainability. However, it is not because it is very hard for a private and for-profit model to survive in implementing ICT-enabled kiosks in rural India that it is impossible for any ICT-enabled kiosk to be successful and sustainable. Therefore, the answer to my thesis question I have found out through my research and the interviews is definitely “yes”, they can be successful, but under certain conditions. As we have explained in the beginning of the work, there is a significant urban-rural divide in India which depicts the fact that socio-economic conditions are on average far less good in rural areas than in urban areas. The more representative outcome concerns the literacy rate which stands relatively low in rural areas compared to urban areas. Similarly, there is a digital divide between rural and urban areas; in the sense teledensity is higher in towns than in countryside. The critical discourse (ICT-D) I further explored in the work taught me ICT should not be considered as “end”, but as “means” or “enabler” for bridging digital divide between urban and rural areas and empowering the rural communities, as Satyan Mishra, founder of Drishtee, reminds me several times during the interview. Millennium Development Goals, which had been envisioned in the beginning of the 2000’s, cannot in any way be directly achieved by ICT. Therefore, even though the transformational discourse (ICT4D) is finally questioned, the critical discourse of ICT and Development which considers the whole ecosystem in which the ICT is implemented is definitely more valuable from my point of view as it considers not the technology first, but rather the ecosystem in which and how the technology would have to be implemented. Finally, ICT-enabled kiosks based on private-public partnership (given that the government is the network agency is better according to Tim Unwin) and mobile phones as independent ICT tools can be kind of alternatives for addressing and targeting rural India as well. Mobile phones can certainly even be better and impact faster in some ways for bridging digital divide and helping to drive
- 165. 157 development of localcommunities. Although, penetration of mobile phones in India is increasing and it is a phenomenon which is wide enough to impact rural and remote areas on the long run. In conclusion, there are somehow two different views regarding the future of ICT-enabled kiosks, especially regarding the undeniable emergence nowadays of mobile telephony; Tim Unwin (Personal communication, January 5, 2015) gave me some insights on that: 1. They will continue in a persistent movement. They are doing a lot of work and can still enhance their multipurpose nature by providing in their orchestrated network value-added services and products that are not yet well delivered or just inexistent. It is what ITC e- Choupal and Drishtee are doing currently. 2. They are considered in a transitional movement. As they will never deliver to the whole community, they will consequently become pointless when everybody will be rich enough to afford an individual device (mobile phones). From my point of view, ICT-enabled kiosks could continue to exist in the future and I am going to use the analogy Tim Unwin shared with me during our skype interview: libraries. As libraries used to adapt themselves last century to the evolution of the technology (e-books) with new value propositions for the customers (digital book loan services), the private and for-profit model of ICT- enabled kiosks should reinvent itself. Indeed, it is exactly what ITC e-Choupal and Drishtee did and are still doing, in the opposite of n-Logue, which just abandoned and did not try differently to address and target rural communities. They diversified the bunch of value propositions delivered through new services and products.
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- 180. 172 http://searchcio.techtarget.com/definition/ICT-information-and-communications- technology-or-technologies The Times ofIndia. (2014, July 24). India ranks 135 in human development index: UNDP. Timesofindia.indiatimes.com. Retrieved November 16, 2014, from http://timesofindia.indiatimes.com/india/India-ranks-135-in-human-development-index- UNDP/articleshow/38959685.cms Techinasia (2012). Retrieved from https://www.techinasia.com/dominant-languages-on-internet- english-chinese/ United Nations Development Programme. (2014). Human development index (HDI). Hdr.undp.org. Retrieved November 2, 2014, from http://hdr.undp.org/en/content/human-development-. index-hdi Updateox (2012). State wise internet users in India Census 2011. Updateox.com Retrieved November 2, 2014, from http://updateox.com/india/state-wise-internet-users-in- india-census-2011/ Updateox (2012). State wise mobile phone users in India Census 2011. Updateox.com Retrieved November 2, 2014, from http://updateox.com/india/state-wise-mobile-phone- users-in-india-census-2011/ World Bank. (n.d.). Death rate, crude (per 1,000 people). Data.worldbank.org. Retrieved October 5, 2014, from http://data.worldbank.org/indicator/SP.DYN.CDRT.IN World Bank. (n.d.). Literacy rate, adult female (% of females ages 15 and above). Data.worldbank.org. Retrieved October 5, 2014, from http://data.worldbank.org/indicator/SE.ADT.LITR.FE.ZS?page=1 World Bank. (n.d.). Literacy rate, adult total (% of people ages 15 and above). Data.worldbank.org. Retrieved October 5, 2014, from http://data.worldbank.org/indicator/SE.ADT.LITR.ZS World Bank. (n.d.). Urban vs. Rural population (% of total). Data.worldbank.org. Retrieved October 5, 2014, from http://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS World Bank. (n.d.). GDP (current US$). Data.worldbank.org. Retrieved October 5, 2014, from http://data.worldbank.org/indicator/NY.GDP.MKTP.CD World Bank. (n.d.). GDP, PPP (current international $). Data.worldbank.org. Retrieved October 5, 2014, from http://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD World Bank. (n.d.). GDP per capita (current US$). Data.worldbank.org. Retrieved October 5, 2014, from http://data.worldbank.org/indicator/NY.GDP.PCAP.CD
- 181. 173 13. Appendix 13.1 IDI(2007 and 2002) Source: ITU, 2009
- 182. 174 13.2 IDI accesssub-index (2007 and 2002) Source: ITU, 2009
- 183. 175 13.3 IDI skillssub-index (2007 and 2002) Source: ITU, 2009
- 184. 176 13.4 ICT PriceBasket 2008 Source: ITU, 2009
- 185. 177 States Population AreaRate of Literacy BR, DR and IMR no Names Total Ratio total Rural percentage Urban percentage Total Males (%) Females (%) Rural Males Urban Males Rural Females Urban Females Birth rate Rural 1 Andhra Pradesh 49386799.0 4.2 70.4 29.6 67.7 75.6 59.7 70.2 86.0 52.1 75.0 18.3 2 Arunachal Pradesh 1382611.0 0.1 79.2 20.8 67.0 73.7 59.6 68.8 89.5 53.8 79.0 28.8 3 Assam 31169272.0 2.6 87.1 12.9 73.2 78.8 67.3 76.5 91.8 64.1 85.7 24.4 4 Bihar 103804637.0 8.7 89.5 10.5 63.8 73.4 53.3 71.9 84.4 50.8 72.4 22.1 5 Chhattisgarh 25540196.0 2.1 79.9 20.1 71.0 81.5 60.6 78.2 91.6 55.4 77.7 26.8 6 Goa 1457723.0 0.1 37.8 62.2 87.4 92.8 81.8 91.7 93.5 76.8 85.0 12.6 7 Gujarat 60383628.0 5.1 62.6 37.4 79.3 87.2 70.7 83.1 92.4 62.4 82.1 23.3 8 Haryana 25353081.0 2.1 71.1 28.9 76.6 85.4 66.8 83.2 89.4 61.0 77.5 23.3 9 Himachal Pradesh 6856509.0 0.6 90.2 9.8 83.8 90.8 76.6 90.5 93.7 75.3 88.7 17.5 10 Jammu and Kashmir 12548926.0 1.1 75.2 24.8 86.6 87.3 85.2 75.5 84.9 53.4 70.2 19.5 11 Jharkhand 32966238.0 2.8 77.8 22.2 67.6 78.5 56.2 74.6 89.8 49.8 76.2 26.7 12 Karnataka 61130704.0 5.1 66.0 34.0 75.6 82.7 68.1 77.9 90.5 59.6 81.7 20.2 13 Kerala 33387677.0 2.8 74.0 26.0 93.9 96.0 92.0 95.3 96.8 90.7 93.3 14.8 14 Madhya Pradesh 72587565.0 6.1 73.5 26.5 70.6 80.5 60.0 76.6 90.2 53.2 77.4 29.2 15 Maharashtra 112372972.0 9.4 57.6 42.4 83.2 89.8 75.5 86.4 93.8 67.4 85.4 34.6 16 Manipur 2721756.0 0.2 74.9 25.1 79.9 86.5 73.2 84.1 92.1 70.0 80.2 14.8 17 Meghalaya 2964007.0 0.2 80.4 19.6 75.5 77.2 73.8 72.8 93.2 69.5 89.5 26.6 18 Mizoram 1091014.0 0.1 50.4 49.6 91.6 93.7 89.4 88.4 98.7 80.0 97.5 21.1 19 Nagaland 1980602.0 0.2 82.8 17.2 80.1 83.3 76.7 79.5 92.1 72.0 88.1 17 20 Odisha 41947358.0 3.5 85.0 15.0 72.9 82.4 64.4 80.4 91.8 61.1 80.7 21.4 21 Punjab 27704236.0 2.3 66.1 33.9 76.6 81.5 71.3 77.9 87.3 66.5 79.6 17.2 22 Rajasthan 68621012.0 5.8 76.6 23.4 67.1 80.5 52.7 77.5 89.2 46.3 71.5 27.9 23 Sikkim 607688.0 0.1 88.9 11.1 82.2 87.3 76.4 85.4 92.9 73.4 85.2 18.1 24 Tamil Nadu 72138958.0 6.1 56.0 44.0 80.3 86.8 73.9 82.1 91.8 65.5 82.7 16 25 Telangala 35193978.0 3.0 70.4 29.6 67.7 75.6 59.7 70.2 86.0 52.1 75.0 18.3 26 Tripura 3671032.0 0.3 82.9 17.1 87.8 92.2 83.2 90.9 95.8 80.1 91.4 15.6 27 Uttar Pradesh 199581477.0 16.8 79.2 20.8 69.7 79.2 59.3 78.5 81.8 55.6 71.7 29.2 28 Uttarakhand 10116752.0 0.9 74.3 25.7 79.6 88.3 70.7 87.6 89.8 66.8 80.0 20.2 29 West Bengal 91347736.0 7.7 72.0 28.0 77.1 82.7 71.2 79.5 89.2 66.1 81.7 18.6 Total India 1190016144.0 100.0 73.5 26.5 73.0 80.9 64.6 77.2 88.8 57.9 79.1 13.5 Statistics of states of India: Population, Area, Rate of literacy (2011) Source : Government of India, 2011; Updateox.com, 2012
- 186. 178 States Area Rateof Literacy IMR no Names Rural percentage Urban percentage Total % 1 Andhra Pradesh 70.4 29.6 67.7 43 2 Arunachal Pradesh 79.2 20.8 67.0 32 3 Assam 87.1 12.9 73.2 55 4 Bihar 89.5 10.5 63.8 44 5 Chhattisgarh 79.9 20.1 71.0 39 6 Goa 37.8 62.2 87.4 11 7 Gujarat 62.6 37.4 79.3 41 8 Haryana 71.1 28.9 76.6 44 9 Himachal Pradesh 90.2 9.8 83.8 30 10 Jammu and Kashmir 75.2 24.8 86.6 41 11 Jharkhand 77.8 22.2 67.6 36 12 Karnataka 66.0 34.0 75.6 35 13 Kerala 74.0 26.0 93.9 12 14 Madhya Pradesh 73.5 26.5 70.6 59 15 Maharashtra 57.6 42.4 83.2 78 16 Manipur 74.9 25.1 79.9 11 17 Meghalaya 80.4 19.6 75.5 52 18 Mizoram 50.4 49.6 91.6 25 19 Nagaland 82.8 17.2 80.1 21 20 Odisha 85.0 15.0 72.9 57 21 Punjab 66.1 33.9 76.6 30 22 Rajasthan 76.6 23.4 67.1 52 23 Sikkim 88.9 11.1 82.2 26 24 Tamil Nadu 56.0 44.0 80.3 22 25 Telangala 70.4 29.6 67.7 46 26 Tripura 82.9 17.1 87.8 29 27 Uttar Pradesh 79.2 20.8 69.7 57 28 Uttarakhand 74.3 25.7 79.6 36 29 West Bengal 72.0 28.0 77.1 32 Total India 73.5 26.5 73.0 44 13.6 Statistics of states of India: Area, Rate of literacy and IMR (2011) Source : Government of India, 2011; Updateox.com, 2012
- 187. 179 States Area Rateof Literacy ICT appliances no Names Rural percentage Urban percentage Total % Total phone users % Total computer % Computer with internet % landline phones % mobile phones 1 Andhra Pradesh 70.4 29.6 67.7 63.1 8.4 5.8 4.1 54.9 2 Arunachal Pradesh 79.2 20.8 67.0 48.3 8.2 6.2 2.9 39.8 3 Assam 87.1 12.9 73.2 47.9 9.3 7.7 2.2 43.4 4 Bihar 89.5 10.5 63.8 55.4 7.1 6.2 2.2 51.6 5 Chhattisgarh 79.9 20.1 71.0 30.7 4.6 3.4 1.5 27.2 6 Goa 37.8 62.2 87.4 89.2 31.1 18.4 12.1 53.8 7 Gujarat 62.6 37.4 79.3 69 8.8 5.7 3.3 58.6 8 Haryana 71.1 28.9 76.6 79.4 13.2 7.9 4.5 66.9 9 Himachal Pradesh 90.2 9.8 83.8 82.3 8.4 5.6 7.4 61.5 10 Jammu and Kashmir 75.2 24.8 86.6 69.5 8.4 5.5 3.6 59.3 11 Jharkhand 77.8 22.2 67.6 48 6.9 5.4 2 44.1 12 Karnataka 66.0 34.0 75.6 71.6 12.8 8 7 56.5 13 Kerala 74.0 26.0 93.9 89.7 15.8 9.5 11.6 46.8 14 Madhya Pradesh 73.5 26.5 70.6 46 5.9 4.5 2.4 40.6 15 Maharashtra 57.6 42.4 83.2 69.1 13.3 7.5 6.3 53.7 16 Manipur 74.9 25.1 79.9 57.5 9 6.9 3 52.3 17 Meghalaya 80.4 19.6 75.5 43 7.6 6.1 1.5 39.1 18 Mizoram 50.4 49.6 91.6 72.8 15.2 12.7 1.7 63.9 19 Nagaland 82.8 17.2 80.1 53.1 8.9 7.2 1.3 48.6 20 Odisha 85.0 15.0 72.9 39.8 5.1 3.7 1.8 35.6 21 Punjab 66.1 33.9 76.6 82.2 12.8 7.4 6.7 62.3 22 Rajasthan 76.6 23.4 67.1 70.6 6.9 5.1 2.5 62.5 23 Sikkim 88.9 11.1 82.2 73 11.5 8.2 1.8 67.7 24 Tamil Nadu 56.0 44.0 80.3 74.9 10.6 6.4 5.7 62.1 25 Telangala 70.4 29.6 67.7 63.1 8.4 5.8 4.1 54.9 26 Tripura 82.9 17.1 87.8 48.1 7.2 6.3 2.1 43.7 27 Uttar Pradesh 79.2 20.8 69.7 66.9 8.1 6.2 3.3 61.2 28 Uttarakhand 74.3 25.7 79.6 74.6 11 7.8 3.2 64.8 29 West Bengal 72.0 28.0 77.1 49.2 8.3 6.1 2.3 42.9 Total India 73.5 26.5 73.0 9.4 6.3 4 53.2 13.7 Statistics of states of India: Area, Rate of literacy, ICT appliances (2011) Source : Government of India, 2011; Updateox.com, 2012
- 188. 180 13.8 How ICTscan help achieve MDG? Source: Table 4.2 World Telecommunication Development Report 2003 (ITU, 2003)
- 189. 181 13.9 Separations atthe “Bottom of the Pyramid” Source: Evolution of the telecenter movement (Fillip and Foote, 2007)
- 190. 182 13.10 Examples ofICT applications in rural contexts Source: Garai and Shadrach, 2006
- 191. 183 13.11 Research Study2: regressions and graphs Source: Kendall and Singh
- 192. 184 Source: Kendall andSingh, 2006
- 193. 185 Graphs: Pent-up Demand,Learning by Doing, and Seasonality Issues Source: Kendall and Singh, 2006
- 194. 186 13.12 Interviewing guide:Frequently asked questions The interview is conducted in English by email, skype or direct meeting. The following questions are my areas of research: Question 1 In my master thesis, I am considering socio-economic factors (rural-to-urban migration, education, birth rate, mortality, access to health care, PPP, etc.), in order to define urban-rural divide. I also define the digital divide (explained by awareness, availability, access and affordability) in India. Do you think ICT initiatives can be the solution to bridge digital divide between urban and rural areas, at least to alleviate the gap, and why? Do you consider certain socio-economic factors as very difficult to impact with help of ICT? Which ones and why? What should be done exactly according to you? Question 2 According to your expertise and experience, what are the criteria that make an ICT initiative for rural development is successful? (Success criteria) Question 3 More precisely, I decided to investigate the private and for-profit model of ICT-enabled kiosks in rural India. According to you, could the private and for profit model of ICT-enabled kiosks be a good way to drive rural development in India? (Achievements and critical issues) What are the factors that can mitigate the successfulness of these ICT-enabled initiatives in driving rural India forward? (Success factors)
- 195. 187 13.13 Biographies ofthe interviewees Jai Asundi is Principal Research Scientist at CSTEP (Center for Study of Science, Technology and Policy). He holds a B.Tech degree from IIT Bombay and M.S. & Ph.D. degrees from Carnegie Mellon University, Pittsburgh. His interests lie in the areas of information technology for development, emergency and disaster management, software engineering and project management. He is currently working on the development of a decision support system for public policy problems. He is a senior member of the IEEE was a faculty at the University of Texas at Dallas. (Source: http//:www.cstep.in/) K. M. Baharul Islam is Professor of Communication at the Indian Institute of Management Kashipur, India. He holds LLM in Telecom and Information Technology Laws from the University of Strathclyde (UK), MA (English) from AMU, Aligarh Muslim University (India). He did his PhD from the Tezpur University (India) and Post-Doctorate from Asian Institute of Technology (Bangkok) on new technologies in education. Besides he has also done B.Ed. specializing in Educational Planning and Administration. Dr K M Baharul Islam has been teaching and researching in the area of Communication, Development, Information Technology policy and legal issues for more than two decades. A senior expert in Communication for Development (C4D) and ICT for Development (ICT4D), he has also taken keen interest in educational planning and management, e-Government strategies, cyberspace management and telecom regulations. Besides teaching and research, his professional assignments included development of national strategic plans for and evaluation of ICT programmes in Asian and Sub-Saharan African countries. (Source: http://www.iimkashipur.ac.in/) Rajendra Kumar is a senior officer in the Indian Administrative Service (I.A.S.) and is currently working as a Joint Secretary in the Department of Electronics and Information Technology (DeitY) in the Government of India. He is currently leading three major e-governance projects within DeitY: the National Population Register (NPR) project, and the new Mobile Governance and E- Pramaan (E-Authentication) projects. Dr. Kumar holds a PhD in international economic development and regional planning and an MCP from Massachusetts Institute of Technology, USA, an MTech from the Indian Institute of Technology in Delhi, and a BTech from the Indian Institute of
- 196. 188 Technology in Kanpur.He has published a book and several articles in international journals. (Source: http://www.cprsouth.org) Satyan Mishra is the co-founder and Managing Director of Drishtee. He is passionate about the concept of “creating an ecosystem for the rural and other marginalized communities for facilitating organic growth and overall development. Satyan, an Ashoka fellow is an MBA in International Business from Delhi School of Economics and has 12 years of entrepreneurial experience. Satyan comes from a middle class educated family of Bihar and is dedicated to his work and passion. He was nominated as the ZDNet Asia’s Technopreneur of the Year later in 2006 and presently is a Member of the International Forums like Clinton Global Initiative and Young Asia 21 Forum of Rockefeller Foundation. Drishtee in Satyan’s leadership has won many recognition and awards and the impact is seen in the 12000 odd entrepreneurs Satyan has helped create and sustain. (Source: http://www.drishtee.com) Maitrayee Mukerji is Assistant Professor at the Centre for Studies in Social Management, Central University of Gujarat, Gandhinagar, India. She completed her doctoral dissertation at the Institute of Rural Management, Anand (IRMA), India. (Source: Mukerji, 2013) Tim Unwin is Secretary General of the Commonwealth Telecommunications Organisation (http://www.cto.int), Chair of the Commonwealth Scholarship Commission in the UK (http://cscuk.dfid.gov.uk), UNESCO Chair in ICT4D, and Emeritus Professor of Geography at Royal Holloway, University of London. His recent work has concentrated mainly on information and communication technologies for development (ICT4D), focusing especially on the use of ICTs to support people with disabilities, and to empower out of school youth. In 2004 he created the ICT4D Collective (http://www.ict4d.org.uk) at Royal Holloway, University of London, which was recognised in the 2012 GoTo Think Tank Report as being the 10th top science and technology think tank in the world. Previously, from 2001-2004 he led the UK Prime Minister’s Imfundo: Partnership for IT in Education initiative based within the Department for International Development, and from 2007-2011 he was Director and then Senior Advisor to the World Economic Forum’s Partnerships for Education programme with UNESCO. He is the author or editor of 15 books, and has written more than 200 research papers, chapters and other publications on subjects as diverse as the history of wine, the philosophy of geography and critiques of development theory.
- 197. 189 His latest collaborativebook, entitled simply ICT4D, was published by Cambridge University Press in 2009. He is a Fellow of Education Impact and Honorary Professor at Lanzhou University, China. (Source: http//:ww.itu.int/) i Software technology is the instructions, programmes, or suite of programmes which are used to direct the operation of a computer, or other hardware (meadows et al., 1987, cited in Heeks, 1996, p. 26). Source: Mukerji, 2013, p. 243 ii Hardware technology is the mechanical, magnetic, electronic, and electrical components making up a computer system (Heeks, 1996, p. 26). Source: Mukerji, 2013, p. 243 iii The GITR series has been published by the World Economic Forum in partnership with INSEAD since 2002. The Global Information Technology Report 2014 features the latest results of the NRI, offering an overview of the current state of ICT readiness in the world. This year’s coverage includes a record number of 148 economies, accounting for over 98 percent of global GDP. The GITR has accompanied and monitored ICT progress for more than a decade and raised awareness of the importance of ICTs for long-term competitiveness and well-being. Source: Bilbao-Osorio, Soumitra and Lanvin (eds.), 2014, preface v. iv The DOI is a standard tool that governments, operators, development agencies, researchers and others can use to measure the digital divide and compare ICT performance within and across countries. […] The DOI has been compiled for 181 economies for a period of three years from 2004-2006. An even longer time series for 62 leading economies for the period 2000-2006 is also available. Source: http://www.itu.int/ITU-D/ict/doi/index.html, retrieved November 26, 2014 v GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current U.S. dollars. Dollar figures for GDP are converted from domestic currencies using single year official exchange rates. For a few countries where the official exchange rate does not reflect the rate effectively applied to actual foreign exchange transactions, an alternative conversion factor is used . Source: https://www.data.worldbank.org, retrieved November 26, 2014 vi PPP GDP is gross domestic product converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GDP as the U.S. dollar has in the United States. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current international dollars. For most economies PPP figures are extrapolated from the 2011 International Comparison Program (ICP) benchmark estimates or imputed using a statistical model based on the 2011 ICP. For 47 high- and upper middle-income economies conversion factors are provided by Eurostat and the Organisation for Economic Co-operation and Development (OECD). Source: https://www.data.worldbank.org, retrieved November 26, 2014
- 198. 190 vii GDP per capitais gross domestic product divided by midyear population. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current U.S. dollars. Source: https://www.data.worldbank.org, retrieved November 26, 2014 viii Human Development Index (HDI) is a composite index measuring average achievement in three basic dimensions of human development—a long and healthy life, knowledge and a decent standard of living. Source: http://hdr.undp.org/en, retrieved November 26, 2014 ix Varna is any one of the four traditional social classes of India. Although the literal meaning of the word varna (Sanskrit: “colour”) once invited speculation that class distinctions were originally based on differences in degree of skin pigmentation between an alleged group of lighter-skinned invaders called “Aryans” and the darker indigenous people of ancient India, this theory has been discredited since the mid-20th century. The notion of “colour” was most likely a device of classification. Colours were frequently used as classifiers; e.g., the Vedic scripture known as the Yajurveda is divided into two groups of texts, White and Black. The varnas have been known since a hymn in the Rigveda (the oldest surviving Indian text) that portrays the Brahman (priest), the Kshatriya (noble), the Vaishya (commoner), and the Shudra (servant) issued forth at creation from the mouth, arms, thighs, and feet of the primeval person (purusha). Males of the first three varnas are “twice-born” (dvija): after undergoing the ceremony of spiritual rebirth (upanayana), they are initiated into manhood and are free to study the Vedas, the ancient scriptures of Hinduism. The Shudra live in service to the other three. The Vaishya, in turn, as common people, grazers, and cultivators, contrast with the governing classes—i.e., the secular Kshatriya, or barons, and the sacerdotal Brahmans. Brahmans and Kshatriya themselves contrast in that the former are the priests, while the latter have the actual dominion. In the older description, far greater emphasis is placed on the functions of the classes than on hereditary membership, in contradistinction to caste, which emphasizes heredity over function. The system of the four classes (caturvarnya) is fundamental to the views the traditional lawgivers held of society. They specified a different set of obligations for each: the task of the Brahman is to study and advise, the baron to protect, the Vaishya to cultivate, and the serf to serve. History shows, however, that the four-class system was more a social model than a reality. The multitudinousness of castes (or jati) is explained as the result of hypergamous and hypogamous alliances between the four classes and their descendants. The inclusion of the Shudra into the four-varna system bestowed on them a measure of dignity. A move to accommodate still others not so distinguished led to the rather unofficial acceptance of a fifth class, the pancama (Sanskrit: “fifth”), which include the “untouchable” classes and others, such as tribal groups, who are outside the system and, consequently, avarna (“classless”). In modern times, traditional Hindus, awakened to the inequities of the caste system yet believing the four-varna system to be fundamental to the good society, have often advocated a return to this clear-cut varna system by reforming castes. Individual castes, in turn, have sought to raise their social rank by identifying with a particular varna and demanding its privileges of rank and honour. Source: http://www.britannica.com/EBchecked/topic/623520/varna, retrieved November 26, 2014
- 199. 191 x Jati is derivedfrom the Sanskrit jāta, “born” or “brought into existence,” and indicates a form of existence determined by birth. In Indian philosophy, jati (genus) describes any group of things that have generic characteristics in common. Sociologically, jati has come to be used universally to indicate a caste group among Hindus. Although the lawgivers of the traditional Hindu codes (Dharma-shastras) themselves tend to treat jatis as varnas (social classes) and try to account on other occasions for jatis as products of alliances between the four varnas (Brahmans, Kshatriyas, Vaishyas, and Shudras) and their descendants, a sharp distinction should be made between jati as a limited regional endogamous group of families and varna as a universal all-Indian model of social class. The official Hindu view gives second place to jati as an aberration of varna. In different parts of India, certain caste groups have sought respectability within the varna system by claiming membership in a particular varna. Typical and most successful was the claim of the Rajputs that they were the Kshatriyas, or nobles, of the second varna, and, to reinforce their claim, they invented a new lineage (Agnikula, the dynasty of Fire) to coexist side by side with the Solar and Lunar lineages of ancient times. Those people classified among the Scheduled Castes (also called Dalits; formerly “untouchables”) have adopted caste habits of conduct and sought the status of Shudra (the lowest varna) to escape from their pitiable condition. The very notion of jati has been under attack by reform-minded Indians. They do not always ask for total abolition but frequently advocate a purification of the system by the reabsorption of the jatis into the original, complementarily functioning varnas. Source: http://www.britannica.com/EBchecked/topic/301596/jati , retrieved November 26, 2014 xi Effective teledensity may be defined as either the 'teledensity' (measure of telephone lines per 100 inhabitants) or the ‘mobidensity’ (measure of mobile cellular subscribers per 100 inhabitants) – whichever is higher. Source: Partnership on Measuring ICT for Development , 2005, p. 7 xii telecentre.org is a collaborative initiative that supports and strengthens the telecenter movement. It was founded by the International Development Research Center (IDRC), the Swiss Agency for Development and Cooperation (SDC), and Microsoft®. Source : Fillip and Foote, 2007, p. 9 xiii The SARI project is a collaborative research venture including several organizations: the Indian Institute of Technology (I.I.T.), Madras; Berkman Center for Internet and Society, Harvard Law School; Georgia Institute of Technology; I-Gyan Foundation; and n-Logue Communications Pvt. Ltd. It uses a Wireless-in-Local Loop (WLL) technology to provide internet connectivity to rural villages. Internet connectivity is offered to the local community through kiosks, which are run as self-sustained businesses with cost recovery through service charges. A majority of the kiosks are locally owned and operated by self-employed entrepreneurs, while some are operated by self-help groups from a local non-governmental organization. Technical support for all the kiosks is provided by n-Logue Communications. The project had established 39 village kiosks by August 2003 when this field study was conducted. Out of these 39 kiosks, 20 were being run by local slf-
- 200. 192 employed entrepreneurs whilethe remaining 19 were being run by the local NGO mentioned above. Source: Kumar and Best, 2006, pp. 2-3 xiv Broadband connectivity project: […] In late 2010, Telecom Regulatory Authority of India (TRAI) proposed the National Broadband Plan (NBP), an ambitious project that aims to use Rs 600 billion of investment to bring high-speed connectivity to PCs in 160 million households. The plan outlines setting up of State Optic Fibre Agencies (SOFA) in each state and another National Optic Fibre Agency (NOFA). Under the NBP, the Bharat Broadband Network Limited (BBNL), a special purpose vehicle, was set up by the government. The objective of BBNL is to manage and operate the National Optic Fibre Network (NOFN). The NOFN will eventually provide connectivity to 250,000 Gram Panchayats. If realised, it has the potential to transform many aspects of India, including areas such as education, business, entertainment, environment, health households and e- governance services […]. Source: http://tech.firstpost.com/news-analysis/indias-fantastic- broadband-project-that-you-should-know-about-81871.html, retrieved November 22, 2014 xv E-governement: The term e-government is generally used to describe the delivery of services via network technologies to citizens, businesses and government agencies such as customs clearance, tax payments or licence processing. It encompasses both the ‘front-office’ and ‘back-office’ use of ICTs to support the business processes that a government performs, typically the provision of information and services (see Anttiroiko and Malkia, 2006; Cordella, 2007; Department of Economic and Social Affairs, 2007). Source: Unwin, 2009, p. 283 xvi The OMC provides a user-friendly interface to the system administrator/Operator. OMC handles system administration, maintenance, call control, billing, traffic measurement and subscriber functions. Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014 xvii The BSD is an optional unit used for the remote deployment of base stations through an E1 link over microwave, fiber or copper links. Each BSD can support upto four base. Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014 xviii The Relay Base Station extends the range of the DECLoop™ system by relaying DECT packets between the CBS and subscriber units. The RBS can handle 11 calls simultaneously. Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014 xix The CBS is a small, unobtrusive pole or wall mounted unit providing 12 simultaneous speech channels. Each CBS can serve 30-70 subscribers and to cater for high subscriber densities, several CBSs can be co-located. Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014 xx The DIU is a DECT exchange for wireless subscribers and provides an interface to the Public Switched Telephone Network (PSTN). Functions such as call processing, CBS powering and PCM/ADPCM transcoding are handled by the DIU. Source: http://www.bbs.com.sg/wll.html, retrieved December 7, 2014 xxii The ReMeDi system was developed by the Neurosynaptic Communications Private Ltd. in Bangalore, India. The kit includes the following main parts: ReMeDi Kit – The main box with LED indicators for the measurement
- 201. 193 parameters, batterystatus indicator and a fuse Software CD – Includes software for the normal operation of the ReMeDi kit and for acquiring data from the remote site, displaying it on the screen, storing and viewing at a later time. The software is compatible on various Windows platforms. ECG probe with four limb electrodes and six chest electrodes Temperature probe Blood pressure probe Stethoscope probe Power cord The ReMeDi system operates in two main modes – Standalone doctor mode and Remote doctor / patient mode. In the standalone mode the physician is using the kit locally. In the remote doctor and patient mode, the physician connects to the kiosk PC by dialing an IP address. When the kiosk PC connects as the remote patient PC, the diagnostic data transfer is enabled. Either the physician’s PC can establish a connection to the kiosk PC or vice versa. The user can then create a record for the patient and store every interaction with the patient, as a separate case. The blood pressure, temperature, ECG and stethoscope readings are stored in the patient record and will be available, when viewing the medical history. A sample interaction session is shown in Figure 3 below. The most important feature of the ReMeDi kit is the remote patient parameters measurement function. Through this, the physician is able to obtain medical parameter measures from the patient remotely. This function can be invoked only by the physician and not by the patient. The stethoscope equipment and the thermometer for remote measurement are shown in Figures 4(a) and 4(b). Similar to a regular stethoscope, the remote measurement stethoscope has to be placed at various locations in the patient’s chest as shown in Figure 5(a). The data from the stethoscope measurement is shown on the screen as a graph as in Figure 5(b). The electrocardiograph and the blood pressure probe for remote measurement are shown in figure 6(a) and 6(b).
- 202. 194 The ReMeDi toolkitprovides software application functionality for viewing the parameters measured from each of these probes. It also provides functionality for storage, viewing and reporting on various historical measures for the patient. Source: Dakshinamoorthy and Gordon, 2007, pp. 5-8 xxiv The 73rd and 74th Constitutional Amendments have conferred the right on every registered voter to directly participate in Governance. The Gram Sabha and Ward Sabhas are the institutionalized foundations for decentralized participatory democracy. The Gram Sabha and Ward Sabha have to play a key role in rendering the Gram Panchayat transparent and directly a accountable to the people. The Grama Sabha is a means to solve people’s problems and felt needs and to decide how to use the available resources optimally in ways desired by them, to benefit the poorest in the village through direct democratic and participatory planning. The role of Gram Sabha is vital in bringing good governance in the local self governments. […] Source: http://wikieducator.org/Apard/Gramsabha, retrieved December 7, 2014 xxv Drishtee kiosk at Kesrapur in Bithri Chainpur taluka [Uttar Pradesh] was located 22 kilometers from the district town of Bareilly in the northern state of Uttar Pradesh, India. It had an area of 90.25 sq kms and population of 3771 in 586 households (Government of India, 2001). The sex ratio was 874. Kesarpur was a fairly large village as compared to its neighbouring 20-5 villages and acted as a junction point for the cluster of villages. It was not well connected by road and various modes of transport with neighbouring vilages and big towns like Bareilly, Rithura, et. and hence attracted people from nearby rural and urban areas.[…] While the village had no
- 203. 195 cellular service providers,but being proximate to big towns, signal was available at most places and hence mobile phones were fairly common. The village was electrified in 1976 and 80 per cent of the houses had electricity connections.[…] At Kesarpur, households belonging to the same religion or caste community were clustered at one place and, each custer was separated from the other by kuccha brick-laid lanes. In general, social interactions between middle- and upper-class families of both the religion communities were very limited. […] The children and women hesitated to move around freely in the area dominated by other communities. Most women especially those belonging to Muslim communities, rarely ventured out of the boundaries of their own immediate communities. […] Source: Mukerji, 2013, pp. 120-122