Technology and Innovation as motivators of Economic and Social Changes An evaluation of the Indian Model Presented By: Mr. Saurabh Mehta Managing Director,

Technology and Innovation as motivators of

Economic and Social Changes

An evaluation of the Indian Model

Presented By: Mr. Saurabh Mehta

Managing Director, Avani Cimcon Technologies Ltd.

Faces of India

Scenario

India is slowly becoming one big wired village

Society is becoming more aware, more demanding and

making informed decisions.

Technology is moving into every aspect of the social fabric

Business, Governments and people are adapting and

optimizing technology for growth

The Paradox: Big differences and a long way to go but

things are moving in the right direction

Co-Existence

Modern City skylines

Grass Roots technology penetration

The Wired Indian

Technology parks

Electronic city – Bangalore Largest Technology Park in Asia employing more than 100,000 people

There were no models that India could readily borrow, because the economic development in the context of its diversity and democratic set-up is unique.

It had to learn and develop its own model . This meant creating and multidisciplinary collaborations from the conceptual level.

Effective public-private, private-private, public-public collaboration is a major success factor for absorption of technology

Indians are innovative, flexible and adaptable. Given a more or less free environment they have been able to create an platform conducive to growth and prosperity

Historical Perspective

India has strong science and mathematical tradition

Arya Bhata to Information Technology

Traditional and modern education systems encourage

scientific temper

Indian scientists and engineers have been academically very

successful, quantitatively and qualitatively

Average Indian family spends much of its resources on

children’s education

Current Technology and Industry scenario

Maturing IT industry climbing the ladder of new technology

Bio and chemical sectors thriving; medical tourism, KPO

businesses taking off

Outsourcing taking off in all verticals, IT, Telecom,

Automobile, Pharma R&D……

Internationalization of Indian business

Multitude of Govt. departments, institutes, universities

engaged in a mind boggling variety of projects

Catalysts in India's Technology revolution

Government Initiatives

Education

Science and Technology Policy: Benefits to all

Govt, institutes, Universities

Technologies , products and

servicesBenefits , goods, services, security

Business, craftsmen, NGOs,

other local infrastructure

Common man

Funds, human capital, knowledge

resources

Deals with everything – Policy, Strategy and Implementation

Political Speak

Dr. Abdul Kalam (Past President and an eminent rocket scientist)

“ …In a world where the powers are determined by their share of

knowledge…it is important for India to put her acts together to

become a continuous innovator and creator of S&T products …”

Dr.Manmohan Singh (Prime Minister of India, eminent economist)

“ …science must grapple with key challenges ..increasing population,

greater health risks, degraded natural resources and dwindling

farmlands… we need new science and technology, new paradigms to

address fundamental challenges

Mr.Kapil Sibal Minister for Science and Technology

“ …India is in a position to engage in the global knowledge economy

rather than remaining on the margins “

The Vision and the Dream

India 2006-2010Focus – Growth and build

India 2010-2020Focus – Delivery to all

India 2020-2050Focus - Global leadership

through knowledge revolution

Acquire necessary Science and Technology in most efficient manner.

Indigenous or otherwise.

Make better use of the “leapfrog” technologies.

International quality benchmarks and best practices in local market

Provide qualitative and quantitative advantages to the Technology and

Innovative companies

Provide Tax breaks for R&D expenses.

Introduce technology entrepreneurship at school level

Short and medium term strategiesFocus-dissemination and delivery

Separate R&D, technology and delivery processes

Decentralize Science and Technology infrastructure,

Put industrial R&D, in private hands,

Provide incentives for setting knowledge base institutions for learning.

Make sustainability a mandatory criteria

International agreements for sharing leadership benefits.

Validate every major international agreement for technology implications (e.g. WTO, Kyoto protocol, FTAs)

Long term strategiesFocus-global leadership

Role of Education

Huge pool of literate people, even with 40% literacy India has 400

million people, Bigger then the population of most countries

Just 10% educated workforce would make it 100 million people

available for work.

Every year India adds more then half a million technology

graduates

Largest pool of English speaking educated people, legacy of a

colonial past

Growth of technology has allowed audio video education to

penetrate to rural areas and this is going to incrementally increase

educated manpower.

Communications

Wireless

Internet

Visual Media / Television

Telecommunication and Wireless in India

Wireless moving at a blistering pace Cell phones at ~ 250 million

Lowest cell tariff (voice calls) in the world, ~ 2 cents a minute

SMS: Very popular in India –> Used widely for business even more then email

India overtakes U.S to become 2nd Largest Wireless Network in the world

July 2008 has set an all time record with addition of 9.22 million wireless subscribers.

Revolution has left no one untouched, from the farm to the cities

Communications: Digital Media

Wide spread use of technology, unfettered media

Involvement of the common man in issues of interest

Increasing expectations and demands

Bridging the divide in terms of exposure and understanding

Awareness that there is a big different world out there

Allows for more informed decisions

Satellite channels has brought about a complete revolution

Communications: Internet

Extremely cost effective Broadband provided at ~$6 a month in urban areas and cheaper still in rural areas

The number of broadband subscribers in India stands at 8 mn. growth is mainly coming from Wired DSL Broadband

DOT has a target of 20mn+ for 2010

This increase in subscriber numbers will see the momentum spread to other Web / Internet sectors.

Literally every town in India is provided broadband coverage either wired or wireless 

Outsourcing

Inflow of monies into the country

Inflow of existing technology

R&D outsourcing brings in knowledge

Outsourcing leads to increase in Salaries of employees

Manpower intensive outsourcing allows for distribution of income

Increases the spending power, adds more jobs, grows other

businesses

Money, international exposure, knowledge, processes, technology

etc.

Technology in governance

Gujarat State Wide Area Network (GSWAN)

Establish a reliable horizontal and vertical communication corridor in the state

Enable the state administration and the government to be more productive

Enables electronic record keeping

Allows for electronic transactions

Achieve e-governance commitment

Brings governance closer to the people

Strengthens the disaster management capacity

E-Mitra (Friend), A project by Rajasthan Government

E-Mitra - an integrated e-governance project that aims to

provide all government information and services to rural and

urban masses through e-enabled centers and kiosks

Project being implemented on PPP model

Aims:

Improving service delivery to all stakeholders

Back end Computerization

IT Infrastructure Creation

Human Resource Development

Internet Kiosks

Local Entrepreneur Equipment Computer Printer Battery backup Web-cam Speakers, Microphone Connectivity Antenna assembly

Cost of setting up a village Kiosk - $1,000

A village kiosk consists of:

Services provided

education

Emails

Information

International VOIP calls

Entertainment

Connectivity to the village

Low Cost Rural Banking

Features of the Innovation

Developed by the TecNet group of IIT-Madras

Deployed in rural kiosks in collaboration with ICICI bank

Deposits, withdrawal, and loans Cost: $800/=

Conventional ATM costs $15,000/=

Uses extremely low cost finger print authentication

system ($1/=)

Use of plastic ID cards “smart or otherwise” not viable in

rural areas

Private initiative: ITC E-Chaupal

The Model in Action

‘e-Choupal’ leverages Information Technology to virtually cluster all the

value chain participants, delivering the same benefits as vertical

integration does in mature agricultural economies like the USA.

‘e-Choupal’ makes use of the physical transmission capabilities of current

intermediaries – aggregation, logistics, counter-party risk and bridge

financing –while disintermediating them from the chain of information flow

and market signals

With a judicious blend of click & mortar capabilities, village internet kiosks

managed by farmers themselves, enable the agricultural community access

ready information in their local language on the weather & market prices

Allows for dissemination of knowledge on scientific farm practices & risk

management, facilitate the sale of farm inputs and sales

Real-time information and customized knowledge enhance the ability of

decision making and their farm output with market demand

Gives farmers access to high quality inputs from established and reputed

manufacturers at fair prices.

As a direct marketing channel, virtually linked to the ‘mandi’ system for

price discovery, ‘e-Choupal’ eliminates wasteful intermediation and

multiple handling. Thereby it significantly reduces transaction costs

‘e-Choupal’ ensures world-class quality in delivering all these goods &

services through several product / service specific partnerships with the

leaders in the respective fields, in addition to ITC’s own expertise

Farmers benefit through enhanced farm productivity and higher farm gate

prices, ITC benefits from the lower net cost of procurement

Technology and Innovation: Examples

Technology of E-ticket enabled Air Deccan to start its services;

Today we have fleet or low cost carriers.

Big impact on the full fare carriers who had to lower their costs

Allowed for E-Ticket reduces the costs and middleman commissions.

Innovation and providing a One Rupee sachet for shampoo

Changed industry way of doing business

Volumes have gone through the roof

Focus was to get to the people who have very little money on hand

Micro Finance which a mix of technology and innovation

Brought about a major revolution in the social fabric

Enabled millions of people to get a loan and start something of their own

Loans for poor starting from USD 100 to start home business like buying

a goat, buy vegetables to sell them etc.

Less than 5% delinquency and always profitable.

More Cases

Technology has enabled online booking of Indian RailwaysThe largest rail network in the worldCarries the maximum passengers in the worldFor most it is the only mode of long distance transportationBooking has moved to the internetFuelled growth of credit cards

Technology has brought IT outsourcing:Led to larger disposable incomesIncreased spending habits Increased movement o money through economyIncreased job opportunitiesInflow of foreign money into the countryPercolation of monies into the economy

Urban/Rural Growth

Growth of Urban centers like Bangalore, Mumbai, Pune, Hyderabad

Inflow of residents in all al walks of life not only technology

India a family oriented system, Urban money has started

percolating into rural economy

Growth of secondary cities taking place as first tier cities become

too expensive and crowded

Stated themselves become competitive in attracting business

As technology becomes available in rural areas low tech business

moves rural, ultimately benefits percolate to all

Conclusion

There is a lot happening but there is a lot to be done

India is in the phase of high growth but control mechanisms

are still evolving

Social and Economic benefits are being seen in all strata of

society

We are a very large country and have a very large population

We still have a long way to go for all our people to benefit

We are moving exponentially and there is no turning back

Thank You