How do we go from here?

I read Atanu Dey’s take on Innovation and Entrepreneurship in India in response to a question put forward by Sramana Mitra on her blog Why is the entrepreneurial ecosystem in India not coming together as well as it needs to?

Atanu makes a strong pitch for leveraging existing solutions for development, reasoning that India has not yet reached a stage where we need “cutting edge research and development.” It is sufficient to implement known innovations, he conjectures. A compelling argument but I feel there are a lot of points that need to be bought out in this respect.

To start with, let us understand that we are talking about two things “Does India need (more) innovation?” and “Why does India not innovate as much as it needs to?” And, in my opinion, the answer to the latter does not lie in the former.

Coming to the first question, India does need more innovation, in fact it needs lots of that. Why? A few reasons:

1. India cannot simply follow the development process that US followed. It can take cues but trying to imitate exactly the same cycle will lead to half baked results. To be sure, innovation does not necessarily imply high technology. It also implies a technology/concept that apart from being “innovative” is implement-able too. We did not have to go through the “pager usage phase” to reach “cell phone mobility” even though we did try that. Lets take up rural innovation. We need to innovate and find out ways to increase yields on small land holdings. We need to innovate when it comes to connecting villages to the national mainstream using IT and Internet. Innovation not just in terms of technology but in terms of pricing, marketing, sales & distribution. Isn’t the Amul cooperative model innovative? Ecoflo from Bhinge Brothers[PDF] is one such innovation in rural technology.

2. India needs scale. Incidentally while attending a class at CSIM, Chennai on Saturday, I had stated the same point. India cannot blatantly import models of growth or innovation from developed countries because of its sheer size. Being a democracy makes the task even more challenging. Taking cues from countries like Brazil seems more pertinent especially when it comes to designing solutions for the masses. Dr K L Srivastava at CSIM Chennai made a point in the class, that scale is not always the case – citing disability related issues as an example. In my opinion, looking at absolute numbers the “niche” in India dwarfs similar numbers in US. Scalable solutions are really important.

3. India is a unique country. When I say this, my point is not to allude towards our rich culture and the related. I am trying to draw attention to myriad languages, populations, cultural differences, attitudes, motivations. Even solutions customized for India may not necessarily work for the entire country. Regional innovation is also important. To give you an example, an Internet based micro lending organization like Rang De faces a lot of initial skepticism from lenders because of the non-profitable NGO thinking that social development is generally associated with.

4. India needs to leverage the technology to create more technology. The “low hanging fruits” of existing innovation may have either gone bad or may not even suit my palate. But I can use the seeds of these fruits to create hybrid varieties which I may be able to consume.

Coming to Sramana’s question of why are we not as innovative as we need to, a lot of answers have already been put on her blog. However, innovation is an exponential function. And the required start has been made. Readers can read this blog to find out innovations being undertaken in the social development sector. Not to mention, the Indian solutions like Tata Ace and Nano, Bajaj’s experiment with fuel efficiency. Aravind Eye Care may be cited as an exception that proves the rule – innovation is to be expected from the youth. But, nevertheless, it does prove that innovation can come from any field/age. We have organizations like RIN (Rural Innovations Network) and SRISTI which are fostering and encouraging innovation. One field that is seeing considerable traction is financial inclusion and for the right reasons, of course. I am hoping to see more progress in this one field which in turn will be one of the catalysts for more innovation.

I have been amazed at the optimism we share at TC-I, but it should not be mistaken for foolhardiness. It may be because we have the right balance in terms of experience and intellect.

Ashoka Focuses on Agricultural and Sustainable Development in India

Last week, Ashoka announced that the organization will use a US$15 million grant from the Bill and Melinda Gates Foundation to support the placement of Ashoka fellows in Africa and India.  The grant money will specifically target social innovation and entrepreneurship in agriculture and sustainable development.  According to their press release,

Agricultural and rural sustainable development initiatives supported by Ashoka will be oriented around key issues such as new technologies, farmer productivity, key agricultural policies, and connections between smallholder farmers and markets. Ashoka’s network already includes many Fellows working on agriculture and rural development related issues— whether developing markets for small farmers in Kenya, or using local knowledge to regenerate arid land through natural farming and permaculture in India.

The most promising aspect of this partnership is the approach that Ashoka espouses in ensuring that their social innovations become sustainable – a community based approach:

Ashoka realizes that innovations alone do not create sustainable large-scale solutions in agriculture and sustainable rural development. These new solutions endure only when social entrepreneurs have a community-level understanding, build a broad citizen base of support, introduce incentives for participation, and topple traditional barriers to entry or involvement. This partnership will allow Ashoka to launch 90 social entrepreneurs and their powerful, pattern- changing ideas that are built on this bottom up approach. Additionally, as a product of the increased number of entrepreneurs in this area and their broad base of supporters, Ashoka will be able to identify transformative universal principles that will ultimately revolutionize the field.

Looks like this is a great time to become an Ashoka fellow in India.  I’m looking forward to seeing what developments Ashoka comes up with in 2009.

The Makings of the “Indian Dream”

The Business Standard features an intriguing anecdotal story about salt pan workers in Gujarat who now run their own company within the industry. Twenty-seven salt pan workers joined hands and efforts to form their own private company, called Sabras.

These workers hold 65 per cent stake in equity and are planning to raise it to 74 per cent. Of the three directors on board of Sabras, two are salt pan workers. The remaining 35 per cent in Sabras is held by Saline Area Vitalization Enterprise (SAVE), a public limited firm.

Besides, there are similar attempts on the anvil for onion and mango growers. Inspired by Sabras project, SAVE now aims to form another company called Veg-India where primary producers will have majority stake of 74 per cent. The producers of Sosiya village in Gujarat are in the process of joining hands in Veg-India for selling sweet kesar mangoes.

A board member of the company, Rajesh Shah (who is also a founder of the NGO Vikas), believes that this is the first time in India that people below the poverty line are one of the major stakeholders. At the same time, he notes that voluntary and nongovernmental organizations need to take notice of promising employment and wealth generation opportunities, and restructure themselves to meet these needs.

To me, the story highlights the fact that entrepreneurial spirit lies within all of India’s classes – a sort of parallel to the touted “American Dream.” If the right mechanisms and opportunities were made available to even manual laborers – such as salt pan workers – then perhaps stories like this would become even more common. And an added benefit is that these “rags to riches” stories signal the creation of a new class of people who have worked at all levels of a production chain.

Start-ups gain from entrepreneurial education

Indian start-ups will gain from the increasing trend in business schools to offer the services of their students in developing business plans and conducting analyses – in return, students have an incredible opportunity to work with some of the most innovative start-ups in the country and gain practical experience before they even graduate. Mint reports:

Such programmes, B-schools believe, are mutually beneficial. Start-ups, smaller in size and often working on shoestring budgets and limited resources, cannot engage consultants typically used by larger corporate houses.
First-time entrepreneurs can find themselves out of depth while dealing with the financial or marketing side of the company. A team of student consultants preparing to take on management roles might be better-equipped in such situations. For start-ups, this gives them an opportunity to tap into the university’s resources and network of contacts including plugging into venture capital firms.

The top business schools in India are all looking to integrate this concept into their curricula. Now they just need to take it one step further and find opportunities for their students to contribute toward social ventures and start-ups, which would allow them to learn from truly innovative and unique models while learning about issues that are not traditionally covered in business schools.

Entrepreneurship Encouraged by the Government

iGovernment reports that the Indian government is encouraging the growth of entrepreneurship in several different ways, from public private partnerships to employment generation programs. In its Eleventh Plan, macro, small and medium enterprise (MSME) clusters will be promoted.

The Rajiv Gandhi Udyami Mitra Yojana will assist potential 1.5 lakh first-generation entrepreneurs in completion of various formalities and tasks necessary for setting up of their enterprises and to facilitate them in completing the required formalities during the course of Eleventh Five Year Plan.

To tap into young minds, the government will provide financial assistance to universities to run entrepreneurial clubs. Additionally, initiatives to energize traditional industries are included in the Plan.

A scheme for enhancing productivity and competitiveness of Khadi industries and artisans has been proposed, apart from a scheme for rejuvenation, modernisation and technological upgradation of coir industry.

India is quite famous for its five-year plans, and the trend from focusing on just economic and infrastructure development to also including social and human development is promising.

Jagriti Yatra

The online registration for Jagriti Yatra, an annual train journey to awaken the entrpreneurial spirt of youth ages 18-25, is now available. The program takes about 400 selected Indian youth around the country on a sixteen day trip to introduce them to entrepreneurs and ideas. The program will take place from December 24, 2008 to January 8, 2009.

The aim is to awaken the spirit of entrepreneurship – both social and economic within India’s youth by exposing them to individuals and institutions that are developing unique solutions to India’s challenges. Through this national event we will inspire them to lead and develop institutions nationally and within their communities.

Youth are increasingly celebrity conscious, while those Indians who have made lasting social and economic impact are often not visible as role models. The Jagriti Yatra aims to showcase inspiring success stories by taking young Indians to meet these “real heroes”. These role models, located around the country particularly in rural and semi urban India will demonstrate how social and economic enterprise has succeeded. We propose to engage the national media to act as a multiplier of this message by projecting it to the millions of Indians who will watch this journey unfold across the country, and become an annual event. With this we seek to awaken the aspiration of ‘being the change’ in the youth of India.

Business Incubation Grants – Call for Proposals from infoDev

infoDev is accepting proposals from organizations under an initiative titled “Promoting ICT-enabled Innovation and Entrepreneurship in Developing Countries through Business incubation.”

Throughout the developing world, innovative entrepreneurs are working to establish businesses that are “ICT-enabled”—offering ICT services or utilizing ICTs as a fundamental aspect of their business model. Business incubators focus on helping entrepreneurs to build competitive businesses through the early, high-risk stages of development. The infoDev Incubator Initiative supports business incubators as well as business incubator networks in developing countries with financial and technical assistance.

There are three categories: start-ups in IDA countries (which includes India), international working groups targeting women, youth, and high growth ICT enterprise development, and regional networks on business incubation. Proposals are due April 15, 2008.

E-business and Green Co-ops for Women Entrepreneurs

CSR Asia discusses a guidebook by the United Nations Economic and Social Commission for Asia and the Pacific titled “Developing Women’s Entrepreneurship and E-Business in Green Cooperatives in the Asian and Pacific Region.” The guidebook

argues that new opportunities for farmers in developing countries are available through entrepreneurship and e-business in niche green or ‘organic’ cooperatives.  In particular the opportunities are greatest for women smallholders.  However, it also notes that in order to develop this opportunity, discriminatory practices which constrain women’s entrepreneurship need to be eliminated and it puts forward various recommendations.

The document discusses guidelines for development of e-business in green co-ops, case studies, and policy recommendations.

Rafiq Dossani — Next Google will come from a small town in India

In an interview promoting his new book, India Arriving, Rafiq Dossani (former editor of Business India weekly) said that he sees the next Google coming from not Bangalore or even the developed world, but rather a small town in India.

Now, if you ask whether someone else might do that in India, and who that will be, well I have an answer that will probably surprise you. I think it will come not from Silicon Valley inspired startups, although several of those have been formed and are doing fairly innovative work, but catering mostly to the global markets. It will come when India’s local market reaches a certain level of maturity, and it’ll come from a small town. It won’t come from Bangalore or Bombay, Delhi, or one of those cities.

Dossani believes that the burgeoning entrepreneurial culture of India has reached much farther than the well-known urban centers, and that any city could be a hotbed for innovation.

I can give you one example. Indore is a small town by Indian standards, a very poor town, 2 million people, relies on soybean trading. You wouldn’t think Indore would be a bastion for software product development, but when I visited it, the first thing that struck me was when I spoke at a university, was how highly qualified the faculty was. And then speaking to students: how well trained they were. Even though their language was mostly Hindi and not English, they all used Google with complete fluency.

The entire interview can be found here.