TECH TALK: Reinventing the Future

(Part of the India’s Next Decade series)

Think of what we have seen in the last 20 years of the technology revolution as version 1.0. This has provided a base of 500 million computers and an equivalent number of Internet users worldwide, most of which are in the developing countries. Companies like Intel, Microsoft, Oracle, IBM and Cisco rode the technology transformations well to build out huge power bases and clout. The version 1.0 had as its center of power the US. This was a dollar-denominated technology revolution. What this meant was that only those companies and individuals which would be willing to pay in dollars (or its local currency equivalent) could participate. The doors were closed for everyone else.

Version 2.0 of the revolution will take place in the next decade. It will empower the rest of the world with the benefits of computing and communications. This is a revolution which will be based on purchasing power parity (PPP), which effectively means that the price points have to 10-20% of what they have been in the past. But this revolution will is unlikely to be driven by the likes of Intel and Microsoft. The innovators of the past have an existing gravy train which they will not be willing to give up, creating the opportunities for upstarts to come from below for the next 1 billion users, most of whom are now going to be in the emerging markets of the world. This is the disruptive innovation opportunity which lies ahead for Indian companies.

India has no excuse now to miss out capitalising on the new set of opportunities in the coming years. In 1994, when the previous big disruption happened, it was still early days for India and its software industry. It took until August 1995 to get commercial Internet access in India. Now, in 2002, we have everything going for us a base of engineering talent, inroads into all the top companies in the world and for most of the software companies, and plenty of cash. What we have shown ourselves to be lacking in is envisioning the future.

To invent the future needs thinking which is very different. Computers for Rs 5,000 (the PPP equivalent of USD 700), Software on rent for Rs 250 per month and rock-bottom prices for broadband communications. This is about creating a mass market which does not yet exist it is about creating this market. Think of Amul and its Rs 20 pizza versus the Rs 200 price-point of Pizza Hut and Dominos. It is not that the high-end pizza eaters migrate to the lower price-point, but that a whole new set of pizza eaters are created. Like in a pyramid, the markets at the bottom are many times bigger. Each user may not be able to pay much, but the numbers can more than make up creating an equivalently large opportunity.

This is the context in which we should look a the new WWW Web Services, Weblogs and WiFi. They provide the foundation to think of a very different technology infrastructure one which has its roots in the worlds emerging markets. It is not about using out-dated technology. It is about using the latest ideas and technologies, but looking at them and arranging them differently. More on this next week.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.