As head of the Information Systems Unit of Icrisat, the International Crops Research Institute for the Semi-Arid Tropics, in Patancheru, a suburb of Hyderabad, in Andhra Pradesh, India, he has set an immediate goal that is both simple and ambitious. He wants to stop drought in Africa and Asia from threatening people’s lives. Meanwhile, he spends at least half his time running Icrisat’s information infrastructure, which connects its eight centers across Africa and Asia.
Sounds like a job for an agrichemist, perhaps, or maybe, in other times, a rain dancer. But Balaji thinks it is a job for an information technologist, because, he says, only with information and communications technology can the problem be solved. Such technology will allow knowledge of advanced agricultural techniques to spread to rural farmers, and it will link those rural farmers as well to local, national, and international markets. Both those factors, as well as improved drought prediction and the dissemination of that information, will allow information technology to finally defeat drought-created famine, he predicts. He calls this effort Vasat, for Virtual Academy for the Semi-Arid Tropics.
A few years down the road, Balaji hopes his current work preventing drought from threatening lives will be self-sustaining and he will be able to move on to work on his dream project. That goal is to create a cloud of nanosatellitestiny communications satellites, almost the size of cellphonesover small regions to serve as communications outposts in the sky for poor rural communities. “The technology is already tested,” he says. “It’s only a matter of entrepreneurial initiative to make it real.”
Eli Noam: “We need to recognise that the entire information sector – from music to newspapers to telecoms to internet to semiconductors and anything in-between – has become subject to a gigantic market failure in slow motion. A market failure exists when market prices cannot reach a self-sustaining equilibrium. The market failure of the entire information sector is one of the fundamental trends of our time, with far-reaching long-term effects, and it is happening right in front of our eyes…The basic structural reason for this problem is that information products are characterised by high fixed costs and low marginal costs. They are expensive to produce but cheap to reproduce and distribute, and therefore exhibit strong economies of scale with incentives to an over-supply. Second, more information products are continuously being offered to users. And information products and services are becoming more “commodified”, open, and competitive. The main result of these factors is that prices for content, network distribution and equipment are collapsing across a broad front.”
Jeff: “He’s right that consolidation is a market reaction to this trend (and that’s why government regulation of such consolidation fundamentally mucks with the market). We will see the big get bigger, like supernovas exploding. But underneath them, we are seeing little guys grow on an entirely different scale. And that’s where I think the professor is wrong: There is more demand for information and media than ever. The market is not collapsing. Yes, prices are. But so are costs. And so, some of this growing demand will be served in new ways. And the big guys will not be out of the picture.”
Ross: “Jeff rightly points out that demand for information is elastic (although there are the constraints of attention) the costs of production are falling as well as cost of distribution. The industry is shifting from economies of scale and speed to that of span and scope. To describe this in industry parlance, margins come from versioning and bundling (scope) and aggregation (span). Somewhere in the span, the line between producer and consumer is being blurred. New combinations of goods are further decommoditized through the very act of consumers participating in production. But all products and industries trend towards commoditization, embrace it.”
[via Yuvaraj Galada] Morgan Stanley looks at India’s “rising participation in global labour arbitrage trend ” and the industry in general:
With opportunities in the domestic market being inadequate, Indian educated labour continues to look for outsourcing opportunities and jobs offshore. In the past, India participated in the global labour arbitrage trend in a limited way through the migration of its people to other parts of the world. However, the acceleration in the outsourcing trend in services and manufacturing over the last 10 years has created alternative ways to participate in the global labour arbitrage. So far, India has achieved greater success in sectors that have higher labour intensity but lower infrastructure/capital intensity, such as software and IT-enabled services, pharmaceuticals, gems and jewellery, and garments. However, its success in capital-intensive manufacturing sectors has been limited. Indeed, in a short period of time, India has built a market share of 1.3% in global trade of commercial services (excluding remittances from Indians working abroad) compared to its share of 0.8% in trade of goods.
Though the opportunities in IT and Pharma should create employment, this will account for a small share of people entering the workforce. We believe the take-off of manufacturing and major reforms in the agricultural sector is critical to improving India’s employment levels. China can be a good example to follow. Over the last 10 years, it has provided a larger section of its work force with higher-quality job opportunities through outsourcing in manufacturing as well agricultural sector reforms. In China, the share of employment in the low income-generating agricultural sector has reduced significantly to 45% in 2001 from 68% in 1981. In comparison, in India the share of agricultural workers has reduced to 58% from 67%. We believe that simultaneous progress in manufacturing will be necessary for balanced economic development ensuring participation of lower-income earners in economic progress and social stability.
In a world with increasingly mobile factors of production, India’s rising surplus labour will continue to create opportunities for MNCs and raise of the issue of protection. However, to make full use of this opportunity, India will have to initiate key reform measures, which will enable the manufacturing sector to gear up and provide jobs to the millions likely to join the workforce each year.
[via Ganesh Bhandarkar] Excerpts from the ACM Ubiquity interview where Esther Dyson talks about the coming PC Forum which has as its theme “The Big Picture in Focus”:
The theme points to a tension between the desire, on the one hand, of wanting to be Bill Gates and build something that’s horizontal and universal and repurposeable for everything and on the other hand the reality that in order to solve problems and add real value, you increasingly need to be domain-specific.
For example, you need to understand the medical market, or you need to understand how salespeople work, or how to re-orient a supply chain in real time when a factory has a problem. Even though everybody in the industry says, “Oh, we sell the solution,” they’re just flattering themselves; in reality, all they can sell is tools for the customer and its CIO to build a solution with. That solution includes making sure the marketing and salespeople talk to each other, the salespeople actually use the automation tools, and the CEO has a good strategy. These are the things the vendors have no control over, but they can’t sell effectively unless they understand the CIO’s mindset and challenges.
Think about industry strategy, seismic change, the shift from the paranoia of the last couple of years; realize that business is not just about cutting costs anymore, but also about increasing revenues. But the focus has shifted to domain knowledge, and is no longer on generic horizontal activities. The term “in focus” makes the point that you’ve got to do something in particular and be concrete about what kind of value both you and your company can add. One of the basic messages is: You can’t sell generalizations and make big promises anymore. You’ve got to get down to cases. It has to do with the basic tension between wanting to be grandiose and solving all the world’s problems, and realizing that one can do more good by gardening one garden than by thinking you can fix all the gardens in the world. And of course the same is true for technology.
David Galbraith writes about the opportunity:
The market for local services has traditionally been owned by the phone companies who used phone numbers as the key for Yellow Pages listings, however, Yellow Pages publishers have been lazy and arrogant and are just realizing that they could be crushed by the likes of Google, since the majority of revenues will soon come from online advertising. Traditional publishers’ online Yellow Pages are usually very poorly executed, for example, Dex only introduced searchable listings (instead of browsing a directory) at the beginning of this year.
The model for online local services is probably Citysearch who offer paid listings alongside the directory and include value added content such as ratings. Craigslist should be in there but the lack of focus means that the biggest services advertised have gravitated to the seedy or low cost end of the market.
Although Yahoo has had a local services tab for a while, it hasn’t linked this to pay-per-performance advertising, however, an Overture service is in the works. In addition, Google will surely ditch their increasingly defunct DMOZ powered ‘directory’ tab for the Yellow Pages service at Google labs. For Google, Yellow pages may have an added bonus – since local services require a search term plus some information about yourself, such as location, storing this information in a profile benefits users and helps build in a ‘switching cost’ to lock in users. Perhaps this is the kind of profiling service they should morph Orkut into.
There may be an opportunity for weblog publishing tools to package a product geared to small business websites. In order for PPC (Pay Per Click) local services ads to work, they must click through to a webpage about the service, but most of the 100M local businesses in the US do not yet have a website.
As broadband starts to proliferate in India in the coming years, we need something like Akimbo: “Akimbo is the first fully functional marriage of TV and the Internet, combining easy access to new and fresh video content with the comfort of watching it on your TV- all using the Internet. The Akimbo Playerthe hardware of the Akimbo systemis a stylish set-top box that connects your broadband Internet service to your television set. Simple on-screen menus make it easy to choose and receive up to 200 hours of high quality video that the Akimbo Service delivers right into your Akimbo Player.”
Little rural development can take place without the active leadership of the government. While it is possible to do pockets of small successes, for an across-the-board transformation, the state government must lead the way. It controls the machinery and the resources, it has people with authority and influence at various levels. In other words, it has power and money. In the past, few state governments have shown an inclination for a sustained focus on development other than just before and after elections. With the electorate now exposed to the media and literacy rates increasing, future elections will be fought less on caste and promises, but on hard issues like bijli, sadak and paani (electricity, roads and water) as the recent Assembly elections demonstrated.
This means the government will have to do just that govern. In doing so, it must use its capabilities well. First, it must say no to Corruption. This is perhaps the hardest thing for people in power to do. But without it, there can be little development. If the designated money does not get spent on where it should be, there is little hope. Second, it must focus on creating infrastructure the public goods, as economists call them. This means focusing on infrastructure and human development building proper roads, electrifying villages with reliable power, provisioning water supply, focusing on school education and adult literacy, ensuring proper healthcare and sanitation for everyone, and making sure there is availability of food for the poor.
One of the models that the government can consider is the Rural Infrastructure and Services Commons (RISC), proposed by Atanu Dey and Vinod Khosla (overview, full paper) to address the co-ordination failure that constrains service providers from setting up shop in rural India. Think of RISC as a hub or a rural mall, serving a population within a bicycle-commute distance. From the Deeshaa website:
The Infrastructure-level (I-level) provides a reliable, standardized, competitively-priced infrastructure platform. This is achieved by the coordinated and cooperative actions of firms that specialize in the component activities. Co-located on the Services-level (S-level) are all kinds of firms that provide user services. The presence of the I-level reduces their costs and therefore the prices that the users face. Economies of scope and agglomeration are obtained by the presence of the variety of different service providers.
Given that rural populations are very poor, it is reasonable to expect that the aggregate demand of a single village for any single service will be very low. However, the aggregate demand for, say, a 100 villages for a single service could be significant. Aggregating the demand for many different kinds of services of the same 100 villages would translate into lot of services. These services would require infrastructural inputs which can be commercially and sustainably supplied.
According to Atanu Dey, RISC has the potential for achieving the multi-faceted goals of sustainable economic development through more efficient utilization of available resources. RISC can provide the starting point for addressing the infrastructure and service lacunae that prevail across rural Rajasthan and India.
Whether we like it or not, the spark has to be lit by the state government. For long, much of the population has remained in the dark about the world outside. Now, this is no longer the case. Economic prosperity and the desire for a better tomorrow is becoming the driver for the New India. The transformation of the Bharat that we have so far forgotten and left behind needs to build on Indias democratic foundation and its entrepreneurial culture.
Tomorrow: Rural Development and Entrepreneurship