Reimagining India: Unlocking the Potential of Asia’s Next Superpower (26 page)

A third priority—and most important in terms of reaching people at the bottom of the economic and social pyramid—is self-sufficiency and distributed generation using renewables, of which In-Diya is just one example. Making the most of these kinds of technologies could significantly reduce the need for elephantine projects and disruptive infrastructure, while helping the hundreds of millions still mired in rural poverty to obtain the energy needed for decent living standards.

I do not want to overstate the ease of making progress in this area. A brief account of In-Diya’s development provides some idea of the difficulties. It started as an outgrowth of our corporate social responsibility program, and although we hoped to make it a self-sustaining, profitable business line, we had to subsidize it at its inception with funds from our company foundation, because there was no other way of bringing the full costs down far enough to make it financially attractive to poor villagers.

The In-Diya uses a light-emitting-diode-based lamp, which provides excellent illumination; we take immense satisfaction in hearing that it enables village children to study at night. An LED also lasts many more years than other types of lighting, and when grid power isn’t available, the unit relies on a battery that can be charged with solar panels. The basic package costs around 4,000 rupees ($80), which spread over a number of years offers significant savings on a per-day basis compared
with the alternatives, including kerosene. But Indians in rural villages, in addition to having low incomes, are squeezed for liquidity and credit; they are extremely resistant and in many cases unable to make large up-front payments.

We finally settled on a business model in which specially trained village-based entrepreneurs would rent the units to households in their villages, and assess a small daily fee for the service involved in picking up, charging, and returning the batteries. But then a new constraint emerged—the inability of the local entrepreneurs to buy, or finance the purchase of, a number of units. Bank loans for such undertakings are either unavailable or too costly, even from microcredit institutions. So in a pilot program, our foundation had to donate the start-up costs for the entrepreneurs. Proud as we are of what we’ve accomplished so far, we are still experimenting with how to make this model commercially viable.

Whatever the fate of the In-Diya, I hope India will seize its golden opportunity to create a distributed and intelligent electrical grid that relies on more end-use efficiency and renewables. This is a moral imperative—especially considering the potentially dire consequences of continuing on the current path of inadequate supply and lack of access for hundreds of millions. By integrating energy with its skill in IT, India could even become a world leader in energy, banishing for good the scourge of energy poverty and insecurity.

John Chambers

John Chambers is chairman and CEO of Cisco Systems.

In a fast-urbanizing world, India is setting the pace. Over the next ten years, more than one hundred million Indians will move from villages to cities, seeking schools for their children, health care for their families, and jobs for themselves. With more than 833 million people still living in the country’s 640,000 villages, this unprecedented exodus will only accelerate.

“Mass urbanization” is an abstract concept, but one piece of data may help illustrate the enormity of changes ahead: India today has only 20 percent of the total floor space it will need by 2030 to accommodate the millions expected to migrate to its cities. Put another way, India must build a staggering 900 million square meters of new urban residential space in less than twenty years. Without radical innovation, expansion on such scale will place an unsustainable strain on the environment.

I visit India regularly and always return with deep admiration for its people’s optimism and work ethic. In the world’s largest democracy, change often happens slowly, and it can seem messy and chaotic. But I have no doubt change will come to India. Its people will face up to their problems and get the solutions right.

As India devises those solutions, however, it would do well to embrace some basic principles of successful development. The first is open standards. Imagine the savings in energy costs, carbon emissions, and water that could be realized by adopting global open standards such as Leadership in Energy and Environmental Design (LEED). At our offices
in India, we’ve already implemented LEED standards at their highest levels, dramatically reducing energy usage compared to our buildings in the United States.

Another challenge is traffic. By 2020, motor vehicle traffic in India is expected to increase fivefold—and yet, over that same period, the nation’s highway network is projected to grow by only 4 percent per year. At Cisco we like to say, “Don’t commute to compute.” We have launched a number of initiatives around the world to make it easier for people to get work done without having to move around and consume energy resources. South Korea, for example, has adopted a plan to create 450 “smart work centers” by 2015. Based on open platforms, these centers will result in $1.3 billion savings in transit expenses with a reduction of 1.1 million tons in carbon emissions. Telecommuting can save money and reduce traffic, but only if the digital and energy infrastructure is reliable.

As the country develops, it must employ smart planning techniques and make targeted investments in its cities. To date, in postindependence India, the only major cities created are the capital cities of Chandigarh and Gandhinagar. Indian planners are looking to change the economic face of the nation through the Delhi–Mumbai Industrial Corridor (DMIC). As part of this $90 billion undertaking, the world’s largest infrastructure project, India will build twenty-four new cities across fifteen hundred kilometers, improving the living standards of 180 million people. When completed, DMIC will create a center of global manufacturing and trade supported by world-class infrastructure. Cisco is working with DMIC to provide master planning and information and communications technology, as well as offering citizen services including education, transportation, and public safety and security, all while creating and supplying a new digital urban infrastructure from the ground up.

DMIC will reduce the time it takes to ship goods between Delhi and
Mumbai from fourteen days to a single day, allowing the government to work toward its goal of increasing the share of India’s GDP created through manufacturing from 15 percent to 25 percent by 2022. DMIC, which aims to generate one hundred million new manufacturing jobs, is a powerful example of how visionary leadership can transform communities and cities. India needs more such examples.

Unfortunately, technology is often an afterthought for city planners and real estate developers. When cities were built in the United States, gas and water were cheaply available and cities were designed mainly for cars, not people. Today, it is possible to create smart cities with intelligent networks that manage basic citizen services and replace sprawling concrete jungles fit only for cars with spaces that are walkable, bikeable, and livable. By embracing smart regulation, India can leapfrog less productive traditional stages of development and benefit from best practices employed all over the world. Smart regulation, exemplified by the potential of India’s Unique Identification project, can accelerate how technology at scale enables sustainable growth.

Public-private partnerships should also play a critical role in providing the talent to build and run these new cities—and they are not as complex as many think. At Cisco, we call our Networking Academy program “the world’s largest classroom” because we have trained more than 4.25 million students worldwide. In India alone, we have 197 academies that provide training and certifications to thousands of students.

More is needed. In 2010, India had 500,000 civil engineers and 45,000 architects. That sounds like a lot until you measure it against what’s needed to match projected growth: 4 million civil engineers and 366,000 architects. Millions of young Indians must be trained and jobs created to address this skill shortage. Although India has a National Skill Development Fund to help train workers over the next decade, the gap cannot be closed unless industry, academia, and the government work together. India’s IT industry offers grounds for optimism, having addressed its own challenges by training its workforce in creative ways and completely changing the labor ecosystem.

Urbanization will drive India’s return to the center of the world stage.
But to realize that potential, its cities cannot grow in the unplanned way they traditionally have. Instead, India must foster urban spaces that are sustainable economically, socially, and environmentally. The essential building blocks are visionary leadership buttressed by global open standards, smart regulation, and public private partnerships—all underpinned by technology. As it creates these new cities, India has a chance to be the model for twenty-first-century civilization. I couldn’t be more excited about what the future holds.

Naveen Tewari

Naveen Tewari is founder and CEO of InMobi, an India-based mobile advertising network.

Seven years ago, three friends and I were living in a small apartment in Mumbai, where every morning we would roll up our mattresses, flip open our laptops, and start working—right there in our living quarters, which doubled as our “office.” I had moved back to India from the United States to pursue what I admit was a rather unfocused vision of building a big, successful business. Along the way, we tore up numerous business plans (in one case just a couple of days after receiving some seed money), we maxed out fourteen credit cards to keep afloat, and we endured anguished questions from our parents, who were understandably curious about what the hell we thought we were doing and how we were going to pay our next month’s rent.

Our folks aren’t quite as anxious about us now. We finally figured out a business plan that made great sense—using technology to place advertisements on smartphones, tablets, and other mobile devices. Even though we heard plenty of warnings that nobody would want to use the Internet, much less look at ads, and on such small screens, we were convinced that we could exploit a lucrative niche serving as middlemen between advertisers and publishers (i.e., companies hosting websites and providing content that rapidly growing multitudes of consumers use their mobile devices for). By 2009, InMobi had established operations in most of South and Southeast Asia; by the middle of 2010, our business had spread to Africa, Europe, and North America—and by the end of
2012, we reached about 578 million consumers spread across 165 countries, through 93 billion impressions (our industry’s jargon for ad views) every month.

India needs a lot more people like me and my partners. Please don’t think me immodest for saying so; I hardly mean to suggest that we’re uniquely gifted. The country is loaded with world-class technical talent, including people who (like quite a few of us at InMobi) returned home after spending time in Silicon Valley. And there are plenty of people here with both the drive and competence to create businesses; the Startup Genome report, which surveyed fifty thousand start-ups globally, rates entrepreneurial caliber in India as equal to that found in Silicon Valley.

The point is that start-ups like InMobi are probably India’s best hope for generating the job growth the country must have in decades to come. Don’t take my word for it—ask the government’s Planning Commission’s own blue-ribbon panel. In a report issued in June 2012 titled “Creating a Vibrant Entrepreneurial Ecosystem in India,” this group of experts observed that large Indian businesses “have not generated significant employment in the past few decades and are unlikely to do so in the coming decade or two.” The same goes for agriculture, where nearly half the country’s people work. The report cited persistent stagnation in the numbers employed in this sector and, echoing widespread predictions, said that the figure “is likely to decline . . . due to improvements in productivity.”

Of course, the information technology services and business process outsourcing industry that sprang up in the past twenty years directly employs 2.8 million people and indirectly provides work for nearly 10 million more. But that’s far from sufficient, given the hordes of young Indians reaching employment age over the next decade, for whom ten to fifteen million new jobs will be needed
each year.
India stands a chance of satisfying that demand for employment, according to the Planning Commission panel, if ten thousand start-ups are launched, and if about one-quarter of those evolve into sizable businesses.

Could that happen? In important ways, the signs are increasingly propitious for the sprouting of firms like ours. Indian society has become more accepting of risk taking and entrepreneurial experiments. Rather than stick to the safe route of providing services for multinational giants based abroad, more Indian companies are taking bigger chances by building businesses around their own innovative products and technologies. By some estimates, the number of product-based Indian companies has been growing at 30 to 40 percent per annum for the last half decade. Last year, more than 90 percent of the most promising companies spotlighted by NASSCOM, India’s tech industry association, were banking on their own intellectual-property-led business models rather than the provision of low-cost transaction-oriented services to foreign clients.

Furthermore, Indian venture capitalists are gradually becoming more open to backing early-stage start-ups. In the first eleven months of 2012, Indian investors pumped nearly $400 million into 149 early-stage deals. That represented 50 more deals and $60 million more in funding than had been on the table in 2010, according to Venture Intelligence, India’s largest information bank on business deals.

Still, for a country the size of India, the number of start-ups remains vanishingly small. Around five hundred companies are incubated in India annually, compared with about eight thousand in China, according to the Planning Commission’s report. And the domestic support system for even so few enterprises is grossly inadequate. In the Startup Genome report, whereas Silicon Valley unsurprisingly ranks first in terms of the ecosystem necessary for start-ups to thrive, Bangalore ranks nineteenth, below Tel Aviv, São Paulo, and Moscow.