Building Rural Inclusive Enterprises

Building Rural Inclusive Enterprises

India has leapt onto the global map on sheer merit and delivery in the services sector. Urban India stands testimony to this growth and changing lifestyles and higher purchasing power reflect the improving earning levels of those in related sectors.

However, this is not a uniform growth. The growth has touched the lives of few, leaving close to 700 billion rural Indians on the periphery, with even basic amenities still denied to them. “This imbalance is not without its reactions. The Singur protest, the Naxalite movement are all a result of this discrepancy,” says Dr. Ashok Jhunjhunwala, chairman, Rural Technology Business Incubator (RTBI).

While there are efforts being taken to bridge the gap between the two segments, it is more through social development work. Despite being a critical component, that alone cannot enhance the growth rate. The need of the hour, clearly, is to focus on rapid rural development utilising ICT (Information and Communication Technologies). Enhancing job opportunities, improving the agricultural economy – which remains the mainstay of the Indian economy – and providing access to education and healthcare are all required to ensure that the most basic benefits and comforts are accessible to rural India.

Dr. Jhunjhunwala says, “If you take the experience in the last 100 years, development happened with the west transferring routine tasks to the east. Then, these countries took the learnings and moved up the value chain. We are trying to see if the same model can be applied to the rural sector-outsource production and services to rural India from urban India.

With this in mind, Dr. Jhunjhunwala and his colleagues set up RTBI in 2006: a non-profit organisation that aims to provide entrepreneurs with an offering targeted at the rural markets through technology, research and financial help to establish their businesses and make them profitable.

Cashing in on the TeNet  Experience

RTBI has its roots in a 12-year-old initiative, TeNet, a telecom and computer networking initiative set up by the professors of IIT Madras. The need was felt when acquiring a single telephone line proved to be a time-consuming (eight years, easily), costly affair. Research began on how to bring down the cost of installation and provide a scalable solution so that acquiring a connection was also simplified.

While finding the solution was up their alley, marketing and servicing were a different ball game altogether. Thus, was spun off Midas Communication Technology, headed by IIT Alumni, with corDECT, a local wireless loop offering. Today, it is a globally recognised telecom solution provider.

Vijay Anand, manager (New Ventures), RTBI, says, “One of the key learnings from this venture was the need to have cost-effective solutions, build solutions on top of that and then add value engineering. As a result of this focus on cost, the products have a market not only in India but in other emerging markets too.”

It was also clear that any solution can survive only when it generates revenues. Therefore, RTBI was created with a clear goal – of utilising ICT and creating entrepreneurs.

The evolutionary model

Dr. Jhunjhunwala points out: “If you take the experience in the last 100 years, development happened with the west transferring routine tasks to the east – the Far East and then China. Then, these countries took the learnings and moved up the value chain. It is the same in the case of services and India’s growth story. We are trying to see if the same model can be applied to the rural sector – outsource production and services to rural India from urban India.”

Desicrew and Rural Outsourced Production Enterprises (ROPE) are two examples of how this model can work. While Desicrew outsources services, ROPE enables contract manufacturing.

“We also try to focus on the disadvantaged section, which is a double whammy for us since affordability is quite low in this category,” adds Dr. Jhunjhunwala.

The incubation to scaling to a full-fledged company happens in three phases – the exploratory (conceptualization) phase, in the making (piloting) phase and early stage venture (scaling).

An incubatee can leverage RTBI at any stage. “The support could be research/field trials at the first stage, seed fund/early mentorship at the second or support for external funding at the third, all depending upon the maturity of the entrepreneurship venture. The advantage for the entrepreneur is that there are more heads thinking about his/her business,” says Lakshmi Vaidyanathan, director-in-charge, RTBI.

Usually, in three months, there is a clear idea about the feasibility of a venture, says Bharath V. Iyer, assistant manager (New Ventures), who hand-holds the incubatees. If an idea does not seem to be working at that stage, then RTBI works with the entrepreneurs to modify or create a related new product or service based on research data. Till date, only three ventures have been killed completely. Considering that the rural space is relatively unexplored, both Vaidyanathan and Anand point out that an entrepreneur has no prior lessons learnt for identifying requirements and challenges and has to get it by going hands on. If an urban venture requires three years to turn around, a rural inclusive one could take five.

Building Services on Technology

One of the visions of RTBI has been to use ICT for intervention in agriculture, healthcare and education. “Can we get the needed jump using these technologies, on a large scale? That really is what we are working on,” says Dr. Jhunjhunwala. Truly, the diverse nature of the rural economy is a roadblock to implementing uniform solutions in some cases. For instance, eJeevika, a rural employment generation services company, has had to customise its training program depending on the region it is working in. RTBI is now working on forming models where scalability is not an issue.

There have been three major initiatives in healthcare that have had successful project runs but have yet to be taken up on a large scale. “Healthcare is a state subject, so each state will have different law. For instance, one of our ventures is aimed at strengthening the traditional healer network, to train them and to use them to take quality healthcare to the people. But, we need to strengthen this thought so that it can be implemented across the country,” points out Suma Prashant, project manager (Rural Health Initiatives), RTBI.

Telemedicine also had a successful project run, but it has not progressed beyond this stage yet. However, their third venture with a Sri Lankan company, to enable village nurses to do epidemic bio-surveillance using the mobile, has been successful and work is on to take it to the next phase.

The way ahead

The goal is clear – to build rural-inclusive enterprises. To ensure that this focus is not diluted, RTBI is selective about who they work with and take an equity in the ventures so that they can monitor the progress closely. This three-year-old organisation is aware that despite a 12-year head start through TeNet, it still has a long way to go when it comes to ensuring pan-India coverage. Now, its focus is on studying its learnings from the existing ventures, analysing the data that it generates constantly through close interactions with the target users and working out possible models that will see it pushing it into the next stage of covering the large rural population.