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Introduction:

Hard reality confounds cold economic theories. An estimated 300 millions of disadvantaged rural Indians are stuck in a rut of economic frustration – most of them not because they are lazy, but because they have had poor parenting, inadequate education, no mentoring, or simply bad luck. To eradicate wide-spread poverty first step is to empower rural and tribal youth with marketable skills. With improving buying power of rural and tribal communities’ businesses can help by adopting “new business models” to meet the increasing consumer demands of this “new consumption class.”

Education is the key to eradicating poverty, ignorance and unemployment of rural and tribal youth. To empower youth to self-sufficiency implementation of the following criteria by NGOs dedicated to eradication of poverty and illiteracy from tribal and rural areas are suggested:

Do it right the first time by not producing marginally educated youths. Instead offer education to empower them with marketable skills to find well paying jobs. The marginally educated youths may be educated to meet bureaucrats’ definition of literacy but for practical purposes they are functional illiterates.

Do “as much as possible” and “as soon as” you can not only to empower youth with marketable skills but to enable them to improve rural communities by being a productive worker, or better still an entrepreneur to open small businesses to meet increasing demands for consumer products in rural areas.

Deliver highest value at lowest cost for every rupee donated to NGOs. The donors are not interested in helping create dependency on donations. They are for helping those with potential to be self-sustaining so that they learn to take care of personal needs and then extend a helping hand to their immediate families and friends to duplicate their success.

No marketable skills, no job, no income and no potential for self-sufficiency. It is that simple. Not a rocket science for those dedicating life to empowering rural and tribal youth with leadership development, a prerequisite to be a self-reliant knowledge worker in global market place.

As the “new consumption class” grows in the rural and tribal areas, the youth with entrepreneurial skills, adequate micro-financing and business acumen – tenth grade education supplemented by a fast paced 4 – 6 month business program designed for leadership skill developments - will have ample opportunities to set up small businesses. For example, a variety of retail and maintenance service outlets providing cell phones, ceramic filter based safe drinking water systems, cold chain or refrigeration systems for storage and transportation to prevent spoilage (annual losses estimated at 40%) of commodity agricultural products, a number of computer chip technology based products, solar powered battery units for the satellite guided TV sets and servicing rechargeable small batteries for a variety of applications including LED light sets for household and rural community uses, multimedia device (iPods), PC and telephone kiosks, etc to serve the growing demands in the community.

This three part essay is dedicated to rural disadvantaged Indians searching for a better life in economically expanding, democratically empowered modern India.

Part I
Bottom of the Pyramid:

In a book, The Fortune at the bottom of the Pyramid, (Wharton, 2004), Dr. K. Prahalad shows how wide-spread poverty in rural India can be eradicated by adopting business models suitable for reaching out to the BOP (bottom of Pyramid) market. At the BOP, about 60% or less than seven hundred million of 1.1 billion Indians live in rural India and urban slums; most of the BOP people earn less than two dollars a day. The value of $2 in India in terms of purchasing power parity (PPP) is equivalent to about $15 in America. The business growth models used by MNCs created sufficient economic and employment opportunities for masses in all developed nations. America became a most successful nation build on commerce propelled by achievements of the MNCs and the poverty levels in America were reduced to less than ten percent. To help eradicate rural poverty India needs MNCs with “new” growth models for the BOP markets and for creation of new economic and employment opportunities.

The current business models of MNCs are suitable for serving mature markets mostly in urban India for an estimated 300 million population in middle to upper-classes. Using mass production methods – assembly line and the economics of scale models - MNCs have access to manufacture modern products - from all kinds of electronics for information, transportation products including autos and food processing industry, etc - at costs affordable to the BOP markets in rural India. The supply-chain management techniques can provide cost-efficient distribution of retail services at low prices to any area with a critical mass of population. Cost-efficient supermarkets modeled after the Wal-Mart concepts can be developed to serve a cluster of villages in rural India surrounding urban and suburban centers.

In India as in any developed nation the engines of growth are the fields of information technology, financial and professional business services. The unprecedented economic growth in a range of 6% to 8% since 1991 and for 2003 to 2006 running at 8+% may be higher in future (2007 and beyond). The accelerated income growth rates have converted many medium to large cities into very high density urban centers, attracting rural masses looking for economic and employment opportunities. The unplanned influx of poor, semi- and illiterate rural masses have reduced urban centers to huge slums due to lack of adequate, affordable housing with drinking water, indoor toilets and power. The overcrowded cities have turned into urban centers that offer a minimum level of basic infrastructure of roads, power, water and sewerage systems, and communication services, which are barely sufficient to allow foreign and Indian MNCs to create millions of new jobs in private sector by developing consumer goods manufacturing facilities, banking and associated financial services, and IT based back-office and software driven services, etc.

However, sooner than later, nobody would go to many urban centers because they are extremely overcrowded. In rural areas adjoining urban centers and new suburbs – for example, some unauthorized gated communities such as the Sainik Farms in Delhi - have mushroomed to accommodate out migration of affluent, well educated urban dwellers. With increasing number of affluent well educated urbanites settling into suburbs the surrounding rural areas have started prospering. In case of Delhi, prosperity is spreading to rural parts of U.P. and Hariyana adjoining Delhi suburbs. For Mumbai, prosperity has spread to rural parts of mainland in direction of Pune, Konkan belt, Surat and Nasik. For Hyderabad growth is spread along major national and state highways connecting to Mumbai, Nagpur, Warangal and Pune. The growth driven MNCs are establishing businesses in suburban and rural areas stimulating region’s prosperity.

Better roads are now being rapidly built, some say, not fast enough to connect rural India to suburbs and urban centers. The trend to establish new suburbs accelerates spread of the engines of growth to suburbs and surrounding rural areas. With proper planning, developers of suburbs control and eliminate slums. For example, on government approved cleared slum lands if the property builders first use 10% of the area to build housing complexes and provide suitable homes – generally, about 225 sq. feet area with two rooms - free of charge to slum dwellers who lost homes to the project then they get access to remaining 90% of land for building business parks, residential complexes, etc. The process is self-sustaining as it offers construction jobs and other business opportunities to former slum dwellers in their neighborhoods, where new construction and businesses are spawning.

Over the coming decades or so, India is to invest $150 billion on improving its infrastructure and a similar amount on developing organized retail businesses for the economy to continue to grow at annual 8+%. Some projects in the pipeline are railway freight corridors connecting metropolitan areas, mega-power plants, six-lane interstate freeways and modern airports to rival major international airports. The progress in implementation of the Indo-USA nuclear co-operation treaty will boost availability of energy supplies once the planned 30 or so nuclear plants are built all across India. These development projects offer great opportunities to incorporate the BOP markets developments by inducting educated rural youth to meet labor demands as they surface.

According to the National Council for Applied Economic Research (NEAER) India’s urban growth and prosperity is beginning to spread to rural India. India’s rural majority of 600+ million people today accounts for $100+ billion in consumer spending, which is a significant contribution to India’s GDP. The 300 of 400+ million strong urban middle-class households contribute more than 50% of the GDP and $100+ billion rural BOP markets adds another 200 million people to rapidly growing consumer class. The rural markets for fast-moving consumer goods are growing faster than the urban market, though the latter is doing pretty well, too. India still has to address the needs of the BOP markets with an estimated less than 400 million rural poor, mostly landless laborers and peasants living on less than $1 a day.

With jobs moving into suburbs and surrounding rural neighborhoods, the economic opportunities for masses and prosperity of the rural areas are accelerated. The maturing of suburbs with a critical mass of population attracts developers of modern shopping malls to offer consumer products to rural masses. By adopting modern supply chain management techniques supermarkets and shopping malls modeled after Wal-Mart, Target and K-Mart can offer consumer products produced economically on mass scale at prices affordable to rural and suburban population.

In India the MNCs had lacked suitable business models to serve the BOP market, which has been wrongly perceived to be constantly struggling with or dependent on subsidies and aid. That is rapidly changing and Dr. Prahalad in nearly 270 pages of case histories in a 400 page book and a CD containing 35 minutes of video documented success stories from last decade or two. When the poor at the BOP level are treated as customers, they can reap the benefits of respect, choice, and self-esteem and have an opportunity to climb out of the poverty trap. As small and micro enterprises, many of them informal, become partners to MNCs, enterprises at the BOP level develop real access to global markets and capital, which results in effective transaction governance. MNCs gain access to large new markets by adopting as necessary and developing innovative practices that can increase profitability in both BOP and mature markets.

According to the World Bank, India’s GDP in current U.S. dollars grew from $695 billion in 2004 to $785 billion in 2005 and it is estimated to be around $900 billion for 2006. The Indian economy is poised to cross a trillion dollars mark and a PPP adjusted per capita GDP is estimated to be in a range of $4,000 by 2008. The accelerated growth in income levels of 1.1 billion Indians are attracting attention of many MNC to develop business plans to reach out to the BOP segment of the society. Dr. Prahalad shows that the BOP is a viable and profitable growth market. Understanding and treating the BOP as a market can lead to poverty reduction, particularly if the NGOs and community groups can join the MNCs and local companies as business partners. The development of markets and effective business models at the BOP can transform the poverty alleviation task from one of consistent struggle with subsidies and aid to entrepreneurship and generation of growth.

Part II
Leadership Development for Rural Masses:

As I read (http://money.cnn.com/2006/03/15/magazines/fortune/infosys_fortune_032006/index.htm) the Infosys story in the March 15, 2006 issue of Fortune magazine I was impressed. I asked can it be adapted to train in fourteen week’s business leaders from the street smart rural entrepreneurs. The street smart entrepreneurs get “education by doing”, not through academic scholarship.

Interesting points are that:

Other students go to a business school to learn doing what street smart people already do.  Street smart student go to school to learn and develop business skills and hone-up on analytical abilities. Through self-help street smart people develop the right side of their brain to make a living and be productive workers in the community but they lack analytical skills associated with academic training. Their talent and strength for implementing new ideas remain dormant or unrecognized for lack of suitable opportunities and availability of micro finance credit in their communities. They need to be empowered with academic skills to unleash their entrepreneurial talents for generating wealth. The educated street smart people should be considered suitable candidates for micro finance credits.

Let me elaborate on technical and scientific background to make relevant developments specific to those with analytical skills and others with entrepreneurial talents. The American educational system strives to compliments academically acquired analytical skills to serve the needs of entrepreneurial talents by exploiting the innovative and creative abilities of technologist to enhance commerce to generate wealth. Banks are not averse to lending to small business start up as long as they have a credible business plan and requisite “idea” for marketing to meet the service needs of targeted communities.

Technical modern scientific growth comes in four stages. First a theory or a proposal is made by those skilled in philosophy; it is mostly a subjective process. The subjective theory or the proposal must be reduced to mathematical formulae by those skilled in analytical disciplines including math and sciences; it is the first step to scientific approach. To reduce a subjective proposal or theory to an experimentally verifiable objective science, mathematical formulae are needed. The experimental scientist then objectively verifies the accuracy of the formulae and with it indirectly establishes theory’s accuracy. In the process of experimentation the limiting boundaries for validity of the theory are identified. Once the theory is thus established or scientifically proven then the technology developed to verify the formulae is now available for development of applications. The applications in military technology and consumer markets can induce entrepreneurial talents to be innovative using the creative skills of knowledge workers trained at colleges and universities. This process allows for developing human resources at the same time putting it to productive use to generate personal and national wealth.

Indian pundits and Brahmins have been good at philosophy and mathematical developments but for a number of reasons they didn’t turn into scientists for nearly a millennium. During a millennium of colorizations by Muslims and Europeans the Indian talent for innovation and creativity in scientific development remained dormant. A mindset frozen in the past – seventh century tribal Arabian - and anti-modernization practices of Islamic rulers didn’t allow for Indians to be creative and innovative and this is a sad truth that came with the loss of freedoms for Indians.

During pre-Sultanate period or prior to 10th century, India had developed calculus to study and develop calendars – Hindu punchangs, lunar and solar system based calendars – and navigational tools, but they are not known to have exploited their mathematical capabilities to come up with equivalent of mechanical physics that spawned the Newtonian Revolution in 17th century. The seeds of scientific developments were planted by experimental scientist, Galileo Galilei in 16th century with pioneering work. As for a lack of scientific developments by Indian scholars, Indians scholars failed in part, by not engaging in objective experimental scientific research that Galileo did, which is basic to developments in applied sciences and engineering and in part, it may be Indians lacked political freedoms to explore analytical talents during the Muslim ruled India after the Sultanate period. But this has dramatically changed since 1947 and now we have a significant pool of scientists and engineers skilled in use of applied math. For rural development we need to train rural youth, who are mostly street smart or adapt at learning by doing method of education to develop a scientific mindset. Rural India is where growth of objective scientific methods based education should take place to transform India into a developed nation.

A model school - let me call it the “Indusa School of Applied Sciences and Technology” - to train future generation of leaders should and would have supercomputers, quantum physics labs, biotechnology development programs, spectrometry lab for study of light and tools to build Lasers and workshops for building machines based on mechanical and quantum physics in addition to normal computer and science labs. The school would offer labs where students can study DNA, build satellites, develop projects for renewable energy technologies, learn about artificial intelligence and explore possibilities of building solar photovoltaic cells and turbines driven by wind and ocean waves to generate power. The students would compete at international level Mathematical Olympiads and offer innovative mechanical devices for producing consumer products and military applications at international competitions. To compliment building math skills it will have a music school with diversified faculty to offer introductions not only to classical Indian music but also the Western music.

Now that opportunities in rural India are rapidly increasing, the academicians, businesses and politicians should not get carried away with the quota debate raging in the country and instead should focus on developing leaders from all segments of the communities. Statistically, the ratio of India's lower to upper caste ranges from 6 to 9. There are many talented Indians among lower caste who lack financial means to go for extensive college level academic training.

Just imagine if a Brahmin teacher in his village had not mentored President A.J.P. Abdul Kalam during his formative years and one of his married elder sister not provide him with her family’s hard earned lifesavings to pay for his examination fees we would have missed out on development of a talented scientist as the President of India, not to mention his contributions to development of nuclear and missile technologies. I am delighted and Indian should be grateful that Dr. Kalam got opportunities to excel in modern India. The school I envision would have a faculty able to nurture rural talents like that of President A.P.J. Kalam and other illustrious Indians to their full potential.

About three decades ago fast food industry in USA was struggling for lack of trained man-power. Then came McDonalds with their “quick” – two weeks - staff training programs and rest as they say is history. It changed the nature of the food industry for better for all fast food operations and the process was so contagious that it spilled over to rest of businesses. I rank this development next to assembly line technology for manufacturing. I think Infosys with its Global Tech U and other modern Indian businesses with equivalent technical education programs for their employees are doing just that and India will reap handsome rewards once such employee training becomes a norm not only in rest of the tech world but also manufacturing industries. If engineering and all other colleges adopt the Infosys application science training model then fresh graduates will have jobs waiting for them as they finish their final exams; sort of what happens in USA.

A critical need exists for developing leadership schools to meet India's estimated demand for additional 250,000 leaders in next three years (2007 – 2010). IIMs produce a few good executive level managers a year from its annual enrolment of 1,200. In fact, India needs many schools to train average kids from the school of hard-knocks and turn him/her into a mid-level manager. By school of hard-knocks I mean rural street-smart kids, mostly from poor lower caste families but talented enough for “learning-by-doing” techniques. Can Infosys model based programs be devised at leadership U’s for street-smart kids to be successful managers competing against the best from IIMs? TCS recruits two-third of its new employee each year from rural schools and then trains to bring them up to speed. The “TCS Ignite” is now gearing up to using a seven month fast tract program for science graduates to train them as software engineers to meet the expected manpower demands of the IT market of $80 billion by 2010. If TCS can do it then so can others, including India’s educational institutes.

Judging from on-going political debate on a proposal to raise caste reservations in institutions of higher learning from 22.5% to 49.5% it appears that not enough of India’s universities are actively promoting development of leaders from all communities. In a sense the schools are failing the society by not playing the roll of developing leaders from all communities. Such disparities exist because there is shortage of available seat to accommodate all those who aspire for higher education. Judging from such perspective, the starting of a leadership school campus, Vivekananda Institute for Leadership Development (VILD, http://www.vild.edu.in / ) by the Swami Vivekananda Youth Movement (SVYM; www.svym.net ) near tribal areas is exemplary. Using initial assets of high ideals and the positive benefits of inexperience over twenty years the organizers of the SVYM have made the difference for better in healthcare and education for tribes. It would be interesting to see if the VILD can adopt the Infosys or TCS training models or equivalent and start a short leadership training module to train the graduates of the school of hard-knocks to fill demands for mid-level managers in many opportunities coming to rural areas.

As a guiding principle, every child must have opportunity for good education without worrying about caste or income levels. If the student is qualified we must find funding to support them in colleges. India Inc needs more motivated educators and government administrators to create educational infrastructure and India Inc should provide for facilitates for all who seek access to knowledge, knowledge concepts, knowledge creation, knowledge application and knowledge services. Instead of creating required facilities to satisfy the need to significantly increase access to institutions of learning both at the primary as well at the higher levels of education the issue has been politicized and the quota systems is a power play that has divided the nation.

The quota system may be fundamentally a right solution as long as it is applied judiciously and at the right levels. It cannot become a blanket solution for all time to come. The need is to create opportunities for everyone of equal merit to have proper access. The birth based caste system is at the root of the politically driven quota system. Why not reject caste labels based on birth by eliminating the government bureaucracy that perpetuates it? Na rahenga bans, na bajegi bansuri – no flute to play with, no cacophony to suffer from! It is an outdated, antiquated thinking to keep talking about caste based disadvantages. The first step is to reject all such labels in the 21st century and focus on equality for youth.

Good education and focus on technology is a proven path for personal growth and it enables qualified people of any caste a great deal to overcome any disadvantages that are associated with the caste. Technology offers an equal footing for everything in life and career. Technology is a great leveler, second only to death. Enabling youth to negotiate challenges on the basis of intrinsic merit, quality and perseverance requires expanding educational system to offer a level playing field to all, not quota or reservations system that potentially leads to a dysfunctional or a broken social order.

Most if not all, private as well as public educational institutions receive substantial levels of government funding for its operating costs. Funding for education is limited, which has contributed to not having sufficient educational infrastructure to provide seats to every Indian who aspires for education in general at any level and particularly at higher educational levels. The brand name of IITs and IIMs has contributed to current political debate on increasing reservations from 22.5% to 49.5%. The funding system for education is broken and fundamental changes are needed in the way we approach the concept of education, employment, equality and empowerment.

Part III
Marriage of Analytical Abilities and Results Oriented Project Implementers:

Why train those from school of hard-knocks than bright kids with high IQs to be managers?
The graduates of school of hard-knocks with a proven ability to implement a project have a better chance to be effective managers in communities they grew-up. Too many bright people with very high IQs have failed as managers as they lacked the ability to effectively implement projects in rural areas, a far more important skill in the world of action than the ability to think. Every year, many companies and over ninety percent of new start-up small businesses with excellent ideas and strategies have failed because their employees did not have abilities to execute.

One needs to apply intelligence in executing a plan -- in prioritizing tasks, for example. For getting results the important qualifications are willfulness’ and persistence. These are qualities of the heart, and reside on the right side of the brain, whereas analytical abilities lie on the left side. In recruiting managers, a successful leader seeks persons who could get things done rather than those with sheer mind power.

The irony is that most of the present education system teaches us to think but not to get things done. One way to correct this deficiency of business schools is to recruit self-starting students with right side of brain already developed – the graduates of the school of hard-knocks - with known successes to their credit. Business schools don’t teach project implementation as most teachers don’t know of effective processes for implementing projects. Academicians have access to excellent ideas and strategies but not the know-how to reduce it to applications that have value. Academicians also lack marketing and sales know-how.

No disrespect intended when I say that a brahminical bias in favor of knowledge in India creates a big gap between thought and action. Brahmins, historically have good analytical skills as they are skilled in areas of philosophy, math and may be theoretical sciences, and those from other castes including the disadvantaged classes are more likely to excel as results oriented - technical sales, marketing and business minded. Many leaders who run profit and non-profit organizations, colleges, cricket teams, hospitals, etc lack the ability to deliver results. Millions of government bureaucrats are smart, having entered via competitive exams. Yet they persistently fail to repair roads, provide for drinking water in villages, get teachers to show up at primary schools, get doctors and nurses to show up at village medical centers, register an FIR at a police station — these governance failures hurt the poor. We tend to blame ideology, democracy or the system, but the dirty secret is that current crop of administrators, babus, and educators lack the mundane ability to implement. Even Nehruvian socialism could have delivered more—it didn't have to become “A License Raj”. That’s why our educators should redirect their energies to identify and mentor talent from among other casts and members of the disadvantaged groups.

Socialism or its radical twin communism has been tried to solve problem of rural poverty and employment for semi- or undereducated people. Little did socialistic oriented politicians knew that socialism of any kind promotes mediocrity and judging from the failure of Soviet Empire and subsequently about 25 years ago, China’s adoption of capitalistic methods for economic development only naïve and ignorant can believe in socialism to alleviate poverty at the BOP level or create productive jobs for masses.

The characterization "brahminical bias" focuses on a perception or a tendency many educated Indians have to be a "desk jockeys" and not be risk takers. Many educated Indians have good analytical skills but most shy away from taking risks, possibly because they lack burning desires to implement or reduce ideas to applications that have value, or come up with a strategy to make a profitable business venture to help create jobs and economic opportunities to benefit society as a whole. Such people expect others to implement the ideas. In their mind the connection between analytical skills and the applications technology is missing as they have not allowed the right side of brain to develop.....this is a province of the heart.

Obviously, such characterization is not intended to pick on any Brahmins who have implemented ideas such as organizers of SVYM to improve the lot of rural and tribal poor or people like Mr. Narayana Murthy who with his six partners has made a major contribution to empower educated Indians to be competitive globally. For educated Indians who would rather focus on spirituality, waiting for the day of "Moksha" I suggest they can and should take risks; use their talent to make heaven on earth by helping India become an economic superpower.

In my opinion one way to create leaders from graduates of the school of hard-knocks - who are generally from low castes, rural and tribal areas and mostly poor - is not through reservations but through scholarships and using a learning by doing process. And we must begin at an early age. Make scholarship available to 25% or more students with proven inclination for learning by doing. Most promising students among those accepted for admission are offered scholarships as financial aid on hardship consideration, not caste and tribal linkage.

Producing 250,000 new leaders that are suitable to meet rural India’s growing needs in three years is going to require an understanding of the leadership requirements. I focus on needs of rural India because that’s where more than 60% of Indians live and work. They have desire to be successful but most of them live on less than Rs. 100 ($2) per day. Many are self motivated and enterprising but they lack financial muscle or a credit line to get loans at reasonable interest rates from sources other than local loan sharks. Some farmers, who fall pray to loan sharks, are known to commit suicides as they can’t repay loans while meeting their family’s needs for daily necessities of food and shelters during hard times of crop failures and draught.

Let’s take a look at a few success stories.

The SKS Microfinance with a motto to empower rural poor by providing micro loans at reasonable rates was established by Mr. Vikram Akula, one time McKinsey & Co. consultant. The SKS was founded to empower rural women by providing micro-loans or micro-credit to start small but profitable businesses. He is successful because through modern time-management practices he has developed an efficient model such that its loan default rates are under 3%, which compares favorably with the U.S. credit-card operators with a default rate of 5% or more. The loan business is sensitive to transaction costs and paperwork management. Most such business fails as they fail to be efficient by properly managing transaction costs and paperwork. The SKS succeeded by improvising on business models used by the McDonalds Corp. and Starbuck Corp.; it uses information technology and standardized systems to wring enough efficiency out of each tiny transaction to lower costs.

Using the Starbucks model to reduce the transactional costs, the SKS added acceleration mode adopted from that used by companies such as Coca-Cola and McDonalds to scale-up rapidly across the country. SKS has created automated microfinance through user-friendly back office and field technology to reduce the manual procedures thereby minimizing intensive labor costs and error and fraud. Furthermore anyone with high school education can manage the system.

The SKS loan officers are recruited from enterprising village persons, trained to achieve fast turn around by using a stop watch on each step of the loan process; to identify eligible village borrowers, require them to make weekly payments of standard amount – in multiples of five rupees, no coins, etc. Fast turn around meant a loan officer could visit three villages each morning to handle in less than 30 minutes 50 borrowers instead of 20 at each village. Behind the scenes time spent on accounting was reduced to minutes from hours for each account using simple loan management software, developed and donated to the SKS by Mr. Akula’s friends at McKinsey for use by loan managers without computer experience. With improved efficiency SKS has dropped interests rates to 24% from 30% in 1998; loan sharks charge 50% and higher.

Once he had accumulated several thousand small accounts using initial capital of $52,000 from more than 300 friends and family members, Mr. Akula managed to convince lenders like Citigroup (world-wide microfinance loans of $100+ million), ICICI bank ($10+ million), and other such major banks in India to be their agent to manage for them microfinance funding to rural India. In five years the for-profit SKS group has handed out $52 million to 200,000 people. In about five years of operations more than 10,000 microfinance companies in India have already lend $1.8 billion dollars and there is potential for 20 times as much additional business in rural India.

A typical loan manager working in Shivnoor, 70 miles from Hyderabad, AP, for SKS is Chippa Swarnalatha. She never went to college or studied accounting. She has never sent an e-mail or surfed the net. A seamstress, she manages accounting for hundreds of loans worth about $45,000 in only 30 minutes a day to earn about $90 a month. “I know sewing and I know the SKS system,” says the 26-year old Swarnalatha as she registers payments at the one computer in regional office; she must work fast since most outposts’ likes hers get less than three hours of power a day.

Another major success story is that of Bharati Telecom started and nurtured to a multi billion dollar successful business by Mr. Sanjay Bharati Mittal. Having created a successful telecom giant, Bharati Telecom, Mr. Mittal has now roped in Wal-Mart to form a Joint Venture (JV) to establish super stores all across India. Like the retail divisions of Reliance, ITC Choupal and Tata, among other major MNCs, the Bharati-Wal-Mart JV is getting ready to make available refrigerated storage and transportation systems to farmers to eliminate up to 40% annual loss of agricultural produce to spoilage. As an increasing number of MNCs institute a BOP based marketing strategy, the agricultural portion of an estimated $300 billion Indian retail market will become a part of the organized retailing, making the BOP population an integral part of national development.

The spoiled produce adds zero to rural economy. By instituting modern technology – cold chain for ensuring the availability of fresh products in the market, besides direct linkage with farmers for sourcing farm fresh produce - for storage and transportation of agricultural products, the promoters of the organized retailing concept can salvage most of 40% spoilage losses and add savings to rural economy. Additionally, the cold chain process requires creating jobs in rural areas for operating fresh produce packaging plants. The need for non-refrigerated storage for a longer shelf life food canning plants also adds jobs to rural communities. To be globally cost-competitive improvements in productivity are a given and the products for export must meet international quality standards, which means quality improvement for products supplied to urban markets any where. For quality and productivity improvements, farmers must have access to services of safe (E. coli free) drinking water, soil testing, banking, insurance, medical facilities and restaurants; each of these businesses creates additional jobs for rural youth in communities they live.

E. coli free drinking water is used to wash produce before they are individually wrapped for packaging in containers. Once the toxin free drinking water is available in rural areas, health care improves as infections with water born diseases are contained.

The current level of agricultural production in India is sufficient to feed not only more than a billion Indians but also most of 300 million Middle East populations if losses due to spoilage can be eliminated. Using modern tools of supply chain management and cold chain technology for the commodity agricultural products these hygienically packaged fresh produce and canned food products can be efficiently delivered to export markets at affordable prices.

India would need 250,000 leaders in next three years with a mix of managers. Each executive (an IIM level graduate) like Mr. Akula will depend on hundreds of leaders like Ms. Swarnalatha, - street smart graduates of school of hard-knocks - each managing $45,000; for microfinance and similar operations. There are managerial openings in rural India to manage about $40 billion loan money i.e., over 100 million micro-credit accounts.

In U.S. - the IT field - there is a talk of PC business facing a prospect of decline. I don’t see how this can be true judging from proliferation of cell phones (globally around 1 billion), digital photography (cameras, videos, TVs etc.), World Wide Web (globally 1 billion PCs are connected) and multimedia devices (iPods). I received a gift of a Nano iPod (a 40mm X 90mm X 5mm device) from my kids and I was floored with its capabilities and flawless performance.

Successful business risk takers are not intimidated by occasional reverses. The Apple’s business model for totally integrated PC package (all hardware and software) failed because relative to Microsoft based PCs it captured a disappointing market share of less than 10%. A decade or so later Apple came back with a big success with its multimedia devices. The successful “multi-source” model for PCs using Microsoft software (nearly 90% market share of all PCs sold globally) was fueled by a technology framework made up of multiple manufacturers of chips, PC devices (printers, drives, ports, mice, etc), PC assemblers and multiple developers of all associated digital devices. The peripheral applications have been very successful as globally there are now 1 billion PCs in operation and it is projected that 2006 should see sales of additional 250 million PCs. The demand for advanced PCs will continue to grow. The need for connecting a variety of digital devices to PC increases with insatiable consumer appetite for new digital devices.

Add to this growth, the PCs managed robotic devices for household and commercial use and there is no end to versatility offered by chips and software driven products. The symbiotic relationship between peripheral devices and PCs provide ever greater freedom, choice, flexibility and affordability in our options for communicating, accessing information and experiencing entertainment where and how we want. Unlike PCs a car is just for single use - transportation. The PC on the other hand is a business tool (documents, spreadsheets, accounting, data management, etc.), a communication and entertainment device – industrial controls, QC instrumentation for industrial and hospital use, phone, radio, TV, multimedia – and an educational tool through World Wide Web.

The flat world concept of Thomas Friedman is helping Indian software engineers to prosper by participating in the global economy. Same criteria applies to those engaged in biogenetics and pharmaceutical business and as the super store concept takes hold for export of agricultural produce to Middle East, rural youth and farmers would start enjoying similar benefits. Indian software engineers have pioneered in developing a virtual office environment and the process is now trickling down to Indian villages that are globally connected due to availability of increasing bandwidth in rural India.

A virtual office environment allows product development across global campus. Krishna Bharat, founder of Goggle's India lab has just launched Goggle Finance entirely conceived by the Goggle team in India. Goggle engineers from around the world feed into the Google team in India rather than project being driven by Goggle headquarters in Silicon Valley, thus creating a virtual office environment.

Another first for breathing economic life into villages to stop migration of educated rural adults to cities has become possible as a result of increasing bandwidth in village India. There is enough bandwidth now in big Indian villages and the Satyam Computer services, a top firm doing outsourced work from America, has just started outsourcing some of its American work to Indian villages. Satyam began with two villages and plans to scale up to 150 as the attrition level is low, and the commitment levels are high. The outsourcee has become the outsourcer.


Kishan Bhatia

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