Technology and Innovation as motivators of Economic and Social Changes An evaluation of the Indian Model

1. Technology and Innovation as motivators ofEconomic and Social ChangesAn evaluation of the Indian Model Presented By: Mr. Saurabh Mehta Managing Director, Avani Cimcon Technologies Ltd.

2. Faces of India

3. 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

4. Co-Existence

5. Modern City skylines

6. Grass Roots technology penetration

7. The Wired Indian

8. Technology parks

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

10. 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

11. 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

12. 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

13. Catalysts in India's Technology revolution • Government Initiatives • Education

14. Science and Technology Policy: Benefits to all Funds, human capital, knowledge resources Deals with everything – Policy, Strategy and Implementation Common man Govt, institutes, Universities Technologies , products and services Benefits , goods, services, security Business, craftsmen, NGOs, other local infrastructure

15. 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 “

16. The Vision and the Dream India 2020-2050 Focus - Global leadership through knowledge revolution India 2010-2020 Focus – Delivery to all India 2006-2010 Focus – Growth and build

17. Short and medium term strategiesFocus-dissemination and delivery • 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

18. Long term strategiesFocus-global leadership • 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)

19. 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.

20. Communications • Wireless • Internet • Visual Media / Television

21. 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

22. 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

23. 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 

24. 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.

25. Technology in governance

26. 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

27. 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

28. Internet Kiosks A village kiosk consists of: • Local Entrepreneur • Equipment • Computer • Printer • Battery backup • Web-cam • Speakers, Microphone • Connectivity • Antenna assembly Cost of setting up a village Kiosk - $1,000

29. Services provided • education • Emails • Information • International VOIP calls • Entertainment • Connectivity to the village

30. Low Cost Rural Banking

31. 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

32. Private initiative: ITC E-Chaupal

33. 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

34. 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

35. 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 costsAllowed for E-Ticket reduces the costs and middleman commissions. • Innovation and providing a One Rupee sachet for shampoo Changed industry way of doing businessVolumes have gone through the roofFocus 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 fabricEnabled millions of people to get a loan and start something of their ownLoans 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.

36. 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

37. 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

38. 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

39. Thank You