Innovation as a way forward for India

Ashok jhunjhunwala

In 1981, I returned to India and joined as a faculty at IIT Madras. Madras was the third largest city in the country. I wanted a telephone for my home. I booked the line and it took me 8 years to get the telephone. I wanted to buy a two-wheeler. I was told that Bajaj-Chetak was amongst the best. I went to purchase it, only to be told that it would take four years to get the scooter once I had made the deposit!

In 1984, I wanted to get a PC for my institute. Knowing that it would not be easy to buy one, I got some of our alumni to donate it. A PC was purchased in USA and sent to India. It took me one year to get it released from the customs. To buy a microprocessor chip, costing only Rs 150. A round trip flight from Madras to Delhi would cost about four months of my take home pay.

Many people used to wonder and ask me why I had come back to India form USA.

Now 26 years later, most of the middle class youth would find it difficult to believe what I am saying. This is because India, at least the urban India, has changed very significantly. Urban India is growing in confidence. Today, we add 7 million telephone lines in a month and are one of the fastest growing telecom markets in the world. Our tariff are by far the lowest and are affordable to even lower-middle classes in India. People from middle classes can now buy their own two-wheeler and even a four wheeler. The same class can fly all over the country on the lost cost no frill airways. According to the report Foresight of the Economic Intelligence unit of The Economist in 2006, India will contribute 12.2% of the world.s economic Growth from 2006 to 2020 and will generate 142.4 million new jobs. This will be just behind China and the USA .

The confidence amongst urban Indians is evident in all walks of life with Indians excelling in numerous fields. India has made this leap forward using innovations. Innovation is the way forward, as we continue to tackle numerous challenges.

Our knowledge and skills with Information and Communication Technology (ICT) was used very innovatively in the last thirty years. We had skilled and hard working people with us. Instead of allowing them to just leave India and work elsewhere, we started using the limited number of computers that we had and the meager connectivity to Europe and USA that we obtained, to do work from India for the West. It was difficult in the beginning. Most Western corporations were very suspicious of what we could deliver from India. They were concerned about the security and the quality. But we did not give up against this initial reluctance. Soon our efforts paid off and we started delivering world standard work to the western countries. Orders went on multiplying. We used innovative methods to do more outsourced wok remotely. Developments in Computers and IT technology helped us. Now all kinds of designs could be done on computers and we made use of every opportunity that came our way. Not only did we start getting recognized as the IT services center of the world, we also went ahead to become the design house for the world. We did not just generate wealth for ourselves; we also created huge a confidence amongst us.

We no longer looked at ourselves as inferior to anyone else in the world. This started impacting all walks of life. As the political process in India started liberalizing and freeing up the markets in the nation, we began to innovate more. We learned that India has a very large market, but only at the right price point. We innovated to build better and buy better products and start providing services to our people at affordable prices. Telecom and airline travel are two of the examples. But we did much more. We now have the fastest growing wind power company in the world. Five of the twelve most energy efficient cement plants in the world are in India. We have started to become the auto component capital of the world. We are innovating to design and build the most inexpensive car in the world. India is on the move.

Going Forward

All this, unfortunately, is confined by and large to urban India. Rural India, where 700 million Indians live, is not a part of this rapid economic and attitudinal shift. At the same time, our media is flourishing and daily shows the disparity of those who are being denied the benefits of the .new India.. Further, our democracy is strong and the 700 million rural voters could vote out Governments which fails to include them to be a part of this boom. Such a situation is politically unviable and has to change.

Unfortunately in the post industrial revolution era, there is no viable model in the world for simultaneous rapid development of urban as well as rural areas. But India does not have an option to ignore its rural people. We need to innovate to take rural India along in this growth of wealth and confidence generation exercise. ICT can help. But let us never forget that ICT is a mere tool. It has to be used effectively to fulfill the principle felt needs of rural India, which are improved access to quality education, improved access to quality health care and better livelihoods. Plenty of Innovations would be needed to help us achieve these goals.

About 14 million children become eligible for school every year in rural India. But there are very few good quality teachers. While we struggle to rectify this anomaly, ICT can help teach children remotely. Now, it is not an easy task. Just setting up computers and communication (as is considered by some in the West) in rural areas will hardly help. Delivering quality education to children in villages, where any kind of infrastructure, including electricity is hardly present, and where children get barely enough to eat, would indeed be a challenge. Careful experiments would need to be conducted before scaling such projects.

The same is true of health care. Doctors hardly practice in Rural India. ICT has to be used to strengthen delivery of quality health care services by local health practitioners. Some remote diagnostics would be possible, but it has to be within the means and grasp of villagers. Again careful experiments rather than hype creation are required before scaling.

Agriculture in India has stagnated over the last twenty years. Once again, ICT can become an important tool to enable the development of intensive agriculture. But ground realities show that making an impact in Indian agriculture is not simple. It would require large number of experiments and plenty of technological innovations.

In the nineteenth and twentieth century, poverty was combated by migration of people from poor regions to those places with opportunities. In the late twentieth century, ICT and inexpensive transportation opened up another possibility. Work from the developed regions could be transferred to the regions where the incomes were lower. Thus, manufacturing shifted from the West to the East. Later Services started getting delivered using ICT and shifted to countries like India. Many countries used this work migration to initially create some wealth, but soon innovated to become developed nations. Countries like Japan, Korea, Taiwan and China did this in the last century while one can see India is doing this at the turn of this new century.

Can the same process be used to strengthen rural India? Can work be migrated from urban India to rural India?

There is no reason to think that with access to computers and communications, the young rural Indians cannot provide ICT based services to urban India and to the rest of the world. A rural BPO in each village, employing twenty to thirty people, would begin the process of transformation. Yes, there will be reluctance initially. Questions such as - Can the people in villages deliver? Is the infrastructure adequate? What about quality and security? Can we not get work done in more developed towns? . will arise. These are the same questions that were raised in the West before the services migrated to India. We just need to repeat this process again. Similarly, ICT can be used to migrate manufacturing to rural India; especially the jobs which do not require heavy machinery and large amount of electricity and depend more on usage of human skill and labor. Distributed outsourced production can thus become a reality. If a significant percent of the raw material for such manufacturing also comes from rural areas, there would be an even stronger case for manufacturing in rural India. Agro-industry is therefore the most obvious candidate for this.

But where would this development lead us to

Getting rural India to catch-up with urban India is a mere beginning. The task ahead is even more difficult. Today a country like India consumes less than one twentieth of per capita resource as compared to the West (as per International Energy Agency Statistics Division, India consumed 512.4 Kg of oil equivalent of energy per person as opposed to 7794 Kg of oil equivalent per person in USA in 2003). But urban India consumes far greater per capita resource as compared to rural India. In other words, urbanization significantly enhances per capita resource consumption. The post-industrial development paradigm has implied far larger per capita resource consumption as compared to that in the pre-industrial era. So far only a small fraction of the population in the world had such high consumption. Even then, there are enough warnings that the nature is retaliating as such larger consumption is making our eco-system unsustainable. What would happen if 1.4 billion people of China and 1.1 billion people of India become a part of this development and their per capita consumption start matching that of the West?

The answer is obvious. We just cannot go there. At the same time, people in India and China cannot be asked to slow down their effort to emerge out of poverty and deprivation. Hence this is the time to innovate; one needs to find viable alternative solutions. The biggest innovation today would be to redefine development, which would imply having a .better life., with much less resource consumption. The knowledge economy of tomorrow has to leave behind philosophy of the industrial revolution and definition of progress which associates development with higher consumption.

Higher consumption does not necessarily imply a better life. If education, health care and livelihood opportunities, in addition to a minimum infrastructure, are provided in rural India, quality of life there may be better than in urban India. Moving people from rural India to urban India is therefore not an answer. Our way of living and way of working may have to be re-thought out. Innovation alone can take us forward.