Emergic: Rajesh Jain's Blog

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TECH TALK: My Mental Model: SMEs and India

December 1st, 2003 · No Comments

Recently, Tech Talk completed three years. That is, more than 750 daily columns of about 500 words each. For me, the Tech Talk columns have been a constant feature of a weekly writing schedule (normally Sunday mornings). It has instilled a discipline of reading, researching, thinking and writing. For this Tech Talk series, I thought it would be a good idea to some of the key concepts that shape my current writing, thinking and business life.

Much of my writing has centred around two topics: the first deals with small- and medium-sized enterprises (SMEs), and the other with India. The two questions addressed: how can SMEs grow, and how can we build the new India? Over time, the second topic has become more specialised for India to be transformed, it is important to consider how rural India can be developed. At one level, both the challenges seem very different and far removed from each other. But if one starts thinking conceptually about the two issues, there are a lot of similarities, as we shall see later.

I first started thinking about the SME problem more than two-and-a-half years ago. At that time, I was keen to create a low-cost eBusiness suite for SMEs, which could be made available for the equivalent of a few hundred rupees per person per month. I could relate to at least some of the problems faced by SMEs because I had been running just such an enterprise for many years. As I looked at SMEs more closely, I realised that the more fundamental problems that needed to be addressed were two: how to get total cost of ownership of computing low enough that they could use computers, and how to help them grow their business enough so that they could make the investments in technology. These are the twin traps of technology and marketing that we needed to get SMEs out of.

And thus, I embarked on a journey where the components of the solution have come together over a period of time. What I had thought was a simple, software problem (which could be solved by using open-source software) turned out to have many layers in it and is much more complex. The solution did not lie in just providing cheap software (after all, SMEs could as easily pirate what is currently available and thus get the software for zero cost). It was also not about only trying to provide cheaper computers (refurbished PCs). The problem needed to be thought from a much wider perspective. There were many elements of the value chain that all needed to come together for example, user education, distribution, support, financing also needed to be addressed.

I also think a lot about India, and how it is changing. Our generation has been fortunate enough to witness a near miracle in the past decade. From an isolated, self-contained mass of a billion people, we are now being spoken of as one of the two biggest markets of the world, with China. Our people, long seen as a liability, are now being seen as our biggest strengths. As China becomes the manufacturing capital of the world, India is being thought of as the services destination. As incomes rise, the landscape in urban India is changing. The heady mix of better roads (even some expressways!), malls, brands and cheap credit are fuelling a consumer spending boom in a growing part of urban India. More importantly, the mindset of people was changing to a belief that tomorrow will definitely be better than today. The government still has its mysterious, illogical policies which hold some sectors back, but that is now becoming less so. Just one indicator of this transformation: India will add more phone users this year than in the first five decades after Independence in 1947.

Tomorrow: The Rural India Conundrum

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