The Two E's That Will Determine India's Future

As the coursework has picked up speed at ISB, so also has the frequency with which we have some big names on the campus giving "gyan" filled speeches. Within ten days we had ISB's founding dean Vijay Mahajan, Kellogg's current dean Dipak Jain and NIIT's Chairman Rajendra Pawar visiting us. Prof. Mahajan spoke of the 86% market - basically his spin on the bottom of the pyramid (86% of the people whose per capita GDP is less than $1000), Dipak Jain about how the opportunities present themselves to Indian entrepreneurs not just in India but everywhere around the globe as India gets younger while the rest of the world ages and finally Rajendra Pawar spoke of group entrepreneurship - where a group of four complementary individuals could be more entrepreneurial than they are individually. ISB's entrepreneurship practicum called the PaEV (Planning an Entrepreneurial Venture) is also about to kick off and there is a buzz of ideas and rapid group forming to rally around a business idea by all interested in starting their own business.

As people look for business ideas, my strong belief that you cannot go wrong in India is getting stronger. India lacks almost everything and people here want everything. The products and services are just not keeping up with the consumerism and the business ideas are not keeping up with the willing venture funding. What else can a wannabe entrepreneur ask for? Given a greater than usual probability of new businesses succeeding in the present day Indian setting, there are two E's - in fact let me call them the Big E and the little e that present great opportunities to not only start something new but also contribute to India's future success. The two E's are Education and energy.

NIIT's Pawar spoke of how India's "ordinary graduates" were NIIT's fuel to deliver in the area of IT. The hundreds of thousands of three-year degree (BA, BSc, BCom) holders are the ones left in the dust as the IT revolution carried the engineering graduates to higher ground with it. Most other countries would kill to have so many people reasonably grounded in high school Math, Science and English. These people actually bring a lot more to the table than that. As they find themselves becoming the bottom feeders among the educated, the two E's should help fuel growth opportunities for this neither here nor there educated Indians.

Let us talk about the Big E first. Taking the left behind ordinary graduates as ingredients, just like NIIT did, we can get them trained in many areas other than the IT, call center etc jobs. Lots of small companies need help in all areas of business from marketing, sales, accounting, and specialized functions such as machine maintenance, lab technicians, nurses and on and on. Institutions serving these professions do exist but they don't match the need in terms of quantity or quality. I will publish more posts on these professions and ideas around education in the future. But for now it will suffice to say that this is an area of great potential. As a teaser, here is a small tid-bit - as the US population ages, it is estimated that the acute shortage of registered nurses in the United States will reach 340,000 by the year 2020.

Now coming to the small e. Energy is big business but it just doesn't mean we need to focus only on energy generation - like wind, solar etc. Business ideas about energy generation tend to be grand needing very large investments. However, there are many business opportunities in the supply chain to these energy generation industries as well as in the energy conservation area. Consider this - there is estimated to be $40BB for taking in LED lighting. I recently read an article that an entrepreneur in a small town in Andhra Pradesh has started supplying LED lighting kits to people in Afghanistan. What ingenuity! In the interest of brevity, I will stop here. I will pick up on the two E's in my next post.

UB-Idea Series: The Parking Carousel

Now this is not a new idea. The car parking carousels of all different kinds are common in Japan. Some are more sophisticated than the others but they all operate on the same principle that cars are transported as if by an elevator to a parking space on a spinning carousel to achieve maximum parking density while utilizing vertical space and by eliminating human parking. Given the amount of stress the Indian cities are going through for car parking space among other things, it is again a surprise that some adaptation of the parking carousel concept has not taken off in India. It is likely that this is because of the high capital costs and the potentially very high parking rates that will need to be collected to hasten the return on capital. A good friend of mine who did some preliminary study of these types of systems told me that it would cost around 150 rupees per day in parking charges to cover the cost of the equipment. Given that this is a lot of money in the Indian context, it is imperative that parking carousels are manufactured within India with cheap indigenous designs. Any takers?

Indian Urbanization

Much has been said and written about the haphazard growth of the Indian cities. Some have argued, and in my opinion with a lot of sense, that brand new cities built from scratch is our only hope for sustainable urbanization. Apparently there are some active projects of brand new city building including the $1.07 Billion Nanocity in Haryana headed by the Hotmail Sabeer Bhatia and another project near Bellary in the state of Karnataka. Whatever the status of these projects and whether or not these actually happen it is inevitable that planned urbanization will happen in some shape or form soon. An interesting viewpoint is expressed in an article in the Mint magazine that basically amounts to saying that urbanization and not rural development is key to India's future.

Scalability and sustainability are important factors that the planners of these urban centers need to keep in mind. At the rate India is growing, what may be a good plan today may be woefully inadequate in a couple of years. It is also important to learn from the mistakes of other countries in the way they developed their cities. One of the major complaints that is heard in the United States is the urban decay that the so-called anti-suburbanists lament about. Bigger houses, urban sprawl, big box stores, and lack of proper mass transit etc are all results of decades of suburbanization that began with construction of highways and the American obsession with the automobile. And judging by the uncontrolled growth in India's cities so far, I can tell you that the same is happening in India - only with even less planning. And that is scary.

Energy, water, mass transit, recycling, and many other issues related to sustainable and environmentally friendly growth will offer many entrepreneurial opportunities. It is a good time for budding entrepreneurs to start thinking outside the box in anticipation of the needs of the new as well as old urban centers.