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TECH TALK: As India Develops: Distribution Hubs

April 9th, 2004 · No Comments

Small- and medium-sized enterprises (SMEs) and Rural India are the twin engines for Indias economic growth and development. SMEs need technology solutions which can help them build their digital infrastructure as they search for global opportunities and seek to make operations more efficient. Rural India needs an array of services at affordable price points. The common thread is the need for distribution hubs which aggregate products and services. While SMEs need the equivalent of Tech 7-11s, Rural India needs RISC (Rural Infrastructure and Services Commons).

I have written earlier [1 2a 2b 3a 3b 3c] about the need for Tech 7-11s, so I will summarise only the key points here.

Tech 7-11s are local technology distribution hubs, much like the way the 7-11 convenience stores that dot East Asian neighbourhoods make available groceries and other products to families. The first chain of Tech 7-11s needs to be in SME clusters the hundreds of industrial estates that are present in urban and semi-urban India. Each of these clusters has hundreds of SMEs with very little usage of technology. Tech 7-11s bridge the gap between what technology can do and actually making those dreams a reality for these SMEs.

In some ways, they are akin to the Apple stores in the US. They not only showcase the solutions (hardware-software bundles) but also help educate business owners and managers on how select the right technology and use it well by interacting with the experts at the stores. In India, this is one part of the value chain which hasnt yet happened for SMEs there is no easy way for them to learn the benefits of what value technology can bring for their business.

The Tech 7-11s will solve one of the major issues that solution vendors have in reaching SMEs their large number, their small investment capabilities and their proliferation. It may not always be cost-effective to set up a direct sales force to touch the SMEs (though the yellow pages companies do just that, but they already have a product that is with the customers). Mass media is also not cost-effective in getting the message across to the SMEs. In fact, in India, the business and IT publications talk little about how technology can benefit the bottom of the enterprise pyramid.

The Tech 7-11 is an aggregator of solutions and best practices. In some ways, it also becomes an information exchange as SMEs can start meeting and sharing their learnings. While trade shows and seminars can also offer that functionality, they are too infrequent and costly to organise. Think of the Tech 7-11 as a permalink to SMEs.

The Tech 7-11s can complement the IBM-for-SMEs idea that we had discussed earlier. Taken together, the distribution hubs and the emanating spokes of consultants and implementors can help build out the digital platform for SMEs.

Next Week: As India Develops (continued)


TECH TALK As India Develops+T

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