Summary: This
note was first written as a suggested programme for utilising the
IT penetration in rural areas for developing new entrepreneurs through
a specific training programme in early 2001 as a suggestive note
for rural entrepreneur called Rural Entrepreneur Programme in Information
and Technology (REPIT). Much changes have taken place since then
in the last 4 years with rural penetration of IT through ICT implementing
programmes. The popular media has gone on a hyper to celebrate and
later cremate the impact of rural ICT initiatives.
Our fundamental thrust in the original paper to create rural entrepreneur
on IT - to create businessman instead of seeking to make franchisees
or dealers and sub-dealers out of the rural IT savvy - has been
since then further confirmed by what we have observed. This article
has been rewritten based on our observations.
This Version: March 2005
Entrepreneurship Development Programmes
India is a land of enterprises, where almost 70% of the population is
still self-employed (some place this estimate as high as 80+%). Entrepreneurship
development in India happens in both the sectors organised and the un-organised
sectors in completely different manner. The organised sector has all
the limitations of the red tape and the advantages of resource allocation.
It is estimated that the government spends about 80% of its resource
allocation for enterprises on this sector. The institutions setup for
enterprise development have a set pattern of thinking - dictated either
through government policy or industrial influence, which again is dictated
by necessity. There has hardly been a case where they have envisioned
changes in a particular sector and promoted entrepreneurs to meet the
changes.
Research, if any, into the emerging trends in any industrial sector
are unknown to entrepreneurship development institutions run by government
and finance sector. There may not even be much budget allocation for
such research. There are quite a few freelancers, though highly visible,
they have no responsibility towards the entrepreneurs and their impact
does not add up to much in terms of impact.
The un-organised sector is more dynamic, but, equally limited. Here
the individual who has seen the opportunity is the prime mover and the
rest follow as a herd. The onus of risk lies with the one who ventures
first into the untreaded path.
Both have the inherent approach problem of addressing an enterprise
as though it were existing in a vacuum from the rest of the society.
Computer Education Background
The Computer Education Industry is one of the most profitable industries
that emerged in the 90s in India. The lure of a $ job and posting abroad
is no longer a distant dream even for the lower middle class family.
With the Y2K and the medical transcription work, the need for any high
skill to be employed in the software industry was broken. The BPO that
followed, if anything seems to have been tailor made to suit the English
educated, otherwise very less IT talented, deprived and depraved population
among all classes in the Indian society who are eager to earn more money
with less effort. Today, the computer education training industry is
thriving mainly on teaching spoken English and minimum applications
knowledge. Some of the smarter ones have specific BPO application based
training where their prospect is tied to the future prospect of the
BPO company. This is rather less promising than what was happening in
the 90s, as it is dependent increasingly on a more volatile market.
Just like the entrepreneurship development institutions, the computer
education institute too did not concentrate on building any specific
enterprise or business development skills. To be fair to them they never
promised to do so and were rather content to further their bottom line
through promotion of skill development that has become increasingly
less taxing. Their achievements are measured in terms of the number
of students trained by them who have bagged employment in the top 10
IT companies rather than how many have setup successful businesses.
The tie-up with the industry and in many cases industrial houses that
promoted the training institutions, made the entire IT training institutions
industry dependent. Though the industry has often moaned about the lack
of skilled manpower and eminent industrialists have commented upon the
negligible market share Indian IT companies have in the international
market, they have hardly tried to understand the causes for the same
and explored the upstream educational segment.
Rural ICT Initiatives
Rural ICT programmes in India have been driven largely by the following
factors:
1. ICT manufacturing industries wanting to expand their consumer base
who have either directly or indirectly funded most of the rural ICT
programmes
2. Ambitious academics and bureaucrats with limited and time bound resources
at their disposal
3. Small and medium corporate houses interested in developing sweatshops
in rural India and
4. Large industries that interact specifically to rural markets either
as source or as destination for their products and services.
Hence the most successful rural ICT enterprises are those managed by
ITC, HLL and others. The most written about are those implemented by
ambitious academics and bureaucrats and the most visible signs in villages
are the number of accessory devices supplied by many IT majors. A village
ICT centre has more accessory devices and consumables than even their
urban counterpart. Predictably, the IT hardware companies have often
tied-up with NGOs to provide them with continuous partnership and presence
in rural market, the ITCs and HLLs have tied with end producers / consumers
to cut on their supply / delivery chain and a few sweatshops (under
the current title - small BPO) have sprung up in semi-urban and rural
areas.
The rural ICT entrepreneur is either a kiosk operator (the very low
end of the enterprise spectrum) or a dealer or sub-dealer in ICT consumables
or a franchisee / dealer for monitoring the business of a larger corporate
where he is the least beneficiary or a paid employee. The only high
end enterprise enabled through rural ICT programmes has been where there
is a traditional enterprise that has tied-up with the communication
technology and benefited. Here too, the rural ICT programmes cannot
claim the credit as such an entity would have adopted to such a technology
development without these programmes.
This article is not a criticism of the rural ICT programmes, hence we
would refrain from analysing these programmes further. The point is
that there has been no serious attempt made to promote business management
skills through rural ICT programmes though in some way or another that
is what most of the promoters of such programmes had used to justify
the investments early on.
Why should we create rural ICT Entrepreneurs?
1. Because the lack of information storage, retrieval and communication
is a problem in the villages and a systemised and speedy method of doing
the same certainly can contribute to the betterment of the overall living
condition.
2. Because the technology does open up unending possibilities and it
is true that there can be scope for many such enterprises in the rural
areas.
3. As neither the urban policy maker nor the academic nor the technocrat
understands the nuances of rural life, a local entrepreneur driven by
local needs and a sustainable business model is best placed to bridge
this gap.
4. Because rural India is filled with entrepreneurs, some of the least
supported and most innovative enterprises are to be found amongst the
poorest of the poor in India.
In 2001, we proposed REPIT (a copy of this article can be downloaded
from here), now we propose a programme with similar components. We propose
that a new approach be adopted to develop a ICT based business management
programme in rural India for entrepreneurs. This approach would strengthen
the businessman / women in the rural areas as an entrepreneur and not
necessarily as a technology peddler, which is what many of the current
rural ICT kiosk operators have been reduced to. They would have to become
IT consultants for their area, providing solutions alike to the community,
local businesses, government and non-governmental agencies in the area
and educational institutions. The key components for such a programme
would be as follows:
1. Technology based Business - its advantages and disadvantages
2. Cracking local problems through information technology
3. Innovating services through information services
4. Costing and costing strategies
5. Managing customer relationship
6. Building local skill base for further business expansion
Benefits from such a programme are obvious.
Cost
1. Primarily, it would cut needless and wasteful expenditure through
misplaced rural ICT initiatives
2. It would shift the entire cost of business establishment on the entrepreneur
and thereby reduce the burden on the technology service providers, many
of whom have been hand-holding the entrepreneur much longer than their
early day business projection had glibly estimated
3. The risk of business establishment could be taken by financial institutions,
perhaps some part of the subsidy currently provided by the service providers
and government can be made available to the bank by underwriting the
venture and extending the holiday period for the entrepreneur. The bankers
with their soft footing methods in rural India would appreciate and
gladly cooperate
Business Model
4. There are no sure answers for which services will sell in rural India.
Every area is unique in its values, culture and environment. The best
judge is the local player and he would come up with the most ideal model
of business.
5. Currently the cost maintaining the services is often either managed
by the NGO, service provider or by the government agencies. A large
part of the service provider chain could be instead managed by the locals.
6. The local business person as a partner in evolving technology and
services would provide more intelligent feedback for the technocrat
and service provider than the NGO or their own franchisee who look at
their role only as selling of the services and not their evolution.
Skill Base
7. The continuous enhancement of skills are required for the effective
utilisation of technology only if the service is technology centric,
instead making the local technology driven business person, the local
service would become and not technology be the mainstay
8. A business person with a long term business plan would see the advantages
in building specific skills and knowledge in his area of operation and
place effective schemes for the development of the same.
In effect, REDPRINT suggests an approach where the rural entrepreneur
is viewed with more respect and as a responsible equal. Such an approach
would help build long term confidence and trust and ultimately sustainable
rural ICT businesses. We suggested it in 2001 as a model with growing
conviction, we currently propose it as the model.