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| Vijay Anand |
Though I live in a city, my roots are very much rural. It is in a village that my ideologies about life and everything that shapes my world were formed. It's no coincidence, therefore, that nothing satisfies me more than incubating businesses focused on rural India; and this is what I do for a living at the Rural technology and Business Incubator (RTBI) in IIT Madras.
“Wealth is created not by employment but by building an enterprise” is a comment that I once overheard. True. But as a rule I try not to react to words and instead prefer being a close observer as this gives me better and more grounded understanding of the landscape.
Rural India aspires to be part of what has thus far been a largely urban growth story. Sure, everyone who has participated in the country’s spectacular surge over the last decade or so has benefitted immensely. But the story is still grossly incomplete as vast masses of the Indian population, the ones living in its countless villages, have not been a part of the script.
The question then is quite simple—where do we start? Here are some of my thoughts on what could possibly be the options to spark the entrepreneurial flame in rural India:
Adopt the Franchise Route
It is my habit to start by counting the variables when looking at a business. Just thinking of a business in a rural context throws up a clutch of variables. The most important of these are: establishing relationships with customers, focusing on product offerings and marketing costs, contending with the lack of a brand, and understanding the economics of it all.
The simplest way of coping with these realities is take the franchise route. Since big brands have literally no presence in rural India, pushing out into these markets with foreign labels using the tried and tested franchise mode might be a highly profitable and successful strategy.
Micro-Enterprises
Self help groups are a good way to harness ground-level workforces. But most of these groups struggle to take their products to market. There are two solutions to the problem—build products specially for local markets or/ and make them as part of a larger production cycle revolving around customer interaction.
Outsource Outsourcing
Whatever cost arbitration urban India used to hold, does not exist anymore. But the confidence level that urban India gained by servicing the western world is something that can now be replicated in rural India. For both economics and nation-building, it makes a great deal of sense to move enterprises that flourished during the high noon of the outsourcing business from large urban bases to to small cities, towns and villages.
Decentralized Units
With fuel costs rising and with markets expanding, it makes no sense anymore to focus on a centralized plant for production of goods or materials. It makes quite a bit of sense to build units that could, in a way, outsource production of goods at various key locations making it easier for product companies to optimize their supply chain to their demand markets. This will also extend to industries like the beverage industry, especially in the bottling process.
Develop multi-faceted approach
The homogeneity of business in cities like Bangalore has to be a cause of worry. This is because any market that relies upon a single industry (in the case of Bangalore, it is IT) is at the risk of getting wiped out by the slightest turbulence in the environment, like a prolonged spell of recession. As such it is crucial to develop a multi-faceted approach, and not necessarily develop high density clusters.
The essential business
The best business pitch I’ve heard till date went something like this ‘Would you like to have mangoes off-season?’ That question cut straight to the chase and got me thinking. If you ever get to sit down and start asking such questions you’ll realize that there is a plethora of businesses that one can get into in the rural markets—all the way from supply chain logistics to cold storage and courier services, on a large scale with a bit of technology support.
Someone once told me that there are two kinds of business you can build: The ones that make you rich and the ones that make you wealthy. The difference between the rich and the wealthy is that the wealthy usually employ the rich. There are plenty of opportunities to make money and become reasonably rich in the developed economies, and the same is true of urban centres. But the real big opportunities for wealth creation are in markets that remain unexplored along roads less travelled. In India the real action is yet to come and most of that could be in its rural sprawls where its people live.
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Vijay Anand is a serial entrepreneur, the founder of Proto.in, and the Vice President (Incubation) at IIT's RTBI. He tweets at @vijayanands. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Vijay Anand'. Disclaimer: The views expressed here are that of the author and do not represent the magazine's.
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