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TECH TALK: As India Develops: Distribution Hubs (Part 7)

April 19th, 2004 · No Comments

The last excerpt from the RISC paper by Atanu Dey and Vinod Khosla looks at the benefits of RISC:

Essentially the innovation that we present in this monograph arises from the recognition that there are a large number of very pressing problems that need to be urgently addressed. The solution to a comprehensive set of problems has to be equally comprehensive for it to be successful. We briefly outline a few of the problems that RISC solves.

Rural-urban Migration

RISC would slow down the rural-urban migration and could reverse it as well. People are forced to migrate in search of economic opportunities. It is often the most educated among rural populations that migrate to cities and thus are a drain to the rural economy. RISC would be a most attractive location for the educated rural people to look for employment. They will be able to facilitate and mediate the interactions between the services and the rural population.

Housing, Police, Health, Education, Real Estate and other Services

Over the next 15 years, India would need something like 50 billion sq ft of new housing and billions of sq ft of commercial construction. Much of this will have to be located in currently rural areas. The required investments will be astronomical. Therefore the need for coordination, allocation of capital, logistics etc. is critical. Since real estate requires inputs from various sectors of the economy, the features of RISC, such as economies of scale, scope and network are ideally suited to this end. Affordable housing will be a very big issue. RISC can help focus the efforts of providing affordable housing in rural India.

Multiple Use of Facilities

Because RISC would concentrate a lot of different services at the same location, it would be easy to share many common resources. For example, consider the computing facilities and internet facilities. They have multiple uses from education and training to conducting business and market access. Distance education classes on a wide range of topics could be delivered. At other times, the same computers connected to the internet could be used for business purposes.

Economies of Scale in Manpower Training

Training manpower is one of the most expensive activities in any enterprise. Fortunately, the average costs of this decrease the more people that need to be given some standardized training. Since every service will be provided over hundreds of locations, it will be possible to train people in large batches and thus reduce the cost of training. One can imagine private training firms such as NIIT providing these services. More training and education firms will become viable.

Retention of Manpower

Because a RISC concentrates a lot of different activities in one location, people would be more inclined to be located in the rural area. Thus a doctor serving in the health center of the RISC would find that he or she has access to most of the services that he would have expected in an urban area and so be more likely to be there. The same would go for school teachers, and bank employees, and so on.

Identifying and Encouraging Entrepreneurs

The fuel that powers any modern economy is the pool of entrepreneurs in it. Among the 700 million rural population of India, there must be hundreds of thousands of latent entrepreneurs. Not just that, there must be potentially world-class artists, doctors, scientists, engineers, economists, dramatists, film makers, philosophers, mathematicians, etc., in that huge population. It is an unimaginable loss to the nation and to the world at large that simply because we lack the resources to empower the proper tools and the training, they never achieve their potential.

RISC provides a simple cost-effective method of discovering this talent. Being just a bicycle commute away from every rural person, it draws those that are the most motivated to it and makes available the resources that they need to develop. It puts our limited resources in the hands of those best able to use them.

Market Access

The non-agricultural production of rural India is extremely diverse. The internet has lowered the barriers significantly for market access. Even small producers of handicrafts can reach consumers all the way across the world. Information about products and their characteristics that suit the market most will help in driving the rural economy to produce what is needed. This will generate employment and preserve traditional skills, while tuning them to national and global demand.

Just as piracy and non-consumption are not the solutions to making computing affordable, neither a one-track focus on outsourced services nor wishing away the challenges of rural India is not going to make for a developed nation. If we had unlimited resources in India, we could afford to provide every village in India with the best possible infrastructure and services. But we do not. And that is where RISC comes in. It is a start the first (and arguably, the most important) rapid step on a journey that needs to be completed in limited time. Because given Indias young population, we cannot afford to lose another generation.

Tomorrow: Putting It Together


TECH TALK As India Develops+T

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