A good article in Reuters: “Companies forge lean business models to tap rural India”. It says that in order to bring modern products to rural India they should be re-engineered slightly to become applicable in the local context and affordable for rural customers.
One of the earliest and most simple business process innovations was started by a south Indian health and beauty company, Velvette, in the 1980s. Keen to reach Indians who aspired to use shampoo but could not afford to buy a bottle of it, Velvette began putting small quantities, enough for one or two washes, into plastic sachets.
The idea spread. Multinationals such as Unilever and Procter & Gamble, which distributes Colgate products, adopted it. Now in small shops throughout India you can find streams of sachets dangling from crowded shelves and filled with anything from detergent and cough syrup to potato chips and mobile phone minutes.
This approach is called Frugal Engineering or Gandhian Engineering. The Wikipedia article about it is here. It gives an example of the Tata Nano, the cheapest car in the world today, and some Nokia mobile phones:
For example, new basic mobile phones by Nokia in India which costs 20 USD which can only be used for phone calling / sms and basic functions, on purpose excluding more advanced functions. The per product profit margin is low but the volume of the market is so huge that the total profit is very high.
I found another article related to this topic. It is written by Intel researchers. The reference is: Tony Salvador, John Sherry. Local Learnings: An Essay on Designing to Facilitate Effective Use of ICTs. The Journal of Community Informatics, (2004), Vol. 1, Issue 1, pp. 76-83. They tried to find out why high technology does not spread rapidly around the developing world, or as they put it:
What’s preventing people from buying our stuff?
After several years of ethnographic work in Brazil, Costa Rica, Chile, Ecuador, Bolivia, Peru, Korea, and India they concluded that the problem is that technology is mostly developed in big industrial centres. Therefore, it’s design doesn’t take into account numerous issues that are present in rural areas, like intermittent and unstable power supply, dust falling from the roof of mud houses, extreme weather conditions, etc.
If Jose Miguel had invented computing, what might it look like?
First, it might support local wireless communication needs – people talking to each other when they are away from their homes and lands – or people within various of the scattered communities coordinating with each other to secure the rights and also to operate commercially. It might serve as a hub for local communications, which means many wireless peripheral devices. Second, its focus might well be far less on document writing, and far more on audio and video communication/archiving – for example, gathering and storing the knowledge of those 80 potato varieties. Third, almost certainly it would support music composition and performance. Fourth, it might also be a mini-projection facility to project movies (and play music) at festivals and in the evenings. Fifth, it could support multiple electronic mailboxes – one per person to function like a postal office of sorts. Sixth, it might serve as a library for books and other reading materials that can be “checked out” or read there. Seventh, it might support a wide range of remote cameras and sensors to monitor their own lands and territories and protect themselves from encroachment from large corporate interests – or at least get a good price. Finally, if he had his druthers, heat from the machine, would be channeled to warm his room – or, perhaps, his chickens.
It is vital, we believe, to attend to the details and to attempt to enliven the lived experience in such a way that it can be “felt” by engineers who are inventing and designing technologies; and it is increasingly important as employees are further removed from the locales for which they may be designing. The vast majority of engineers, marketers and management in multinational corporations simply do not have an intuitive understanding of these locales. They are far from each other – in physical, social, cultural, symbolic and emotional distance. If there must be a “digital divide”, it might make more sense and be far more useful for everyone if we were to redefine the divide as a lack of corporate intuition, understanding and empathy for the majority of the planet, than a characterization of haves and have-nots.
Another article: Anil K. Rajvanshi, Development of technologies for rural areas – need for new thinking. It contains some interesting things, so I copy the whole of it here just in case it disappears from it’s original website.
DEVELOPMENT OF TECHNOLOGIES FOR RURAL AREAS –
NEED FOR NEW THINKING
(Published in MOVING TECHNOLOGY, Vol. 7, No.1, March 1992, pg. 2-5. Published by CAPART, New Delhi)
Director, Nimbkar Agricultural Research Institute,
P.O. Box 44, Phaltan-415523, Maharashtra, INDIA
A large number of voluntary organizations are involved in developing technologies for rural areas. However, these technologies have hardly touched the lives of rural population. Data on rural market potential shows that a population of about 250 million in rural areas exhibits a high level of market potential. This is almost 25% total population of India. With such a high market potential, why have the good efforts of organizations developing technologies, devices and products for rural areas not borne any fruit? This article tries to analyze the reasons and to give some possible solutions.
The following points will highlight the existing situation:
- Most of the technologies being propagated in rural areas are urban-based and biased. They trickle down to rural areas.
- Rural population is not composed of subhuman beings. Their needs and aspirations are similar to those living in urban areas. Technology development should take place keeping these aspirations in view.
- Most of the technology development that takes place for rural areas is carried out with an aim to keep it simple so that the devices can be made in rural areas itself. This is a peculiar mindset of technology developers. For poorer sections of rural population, it is asking too much to have them make their own chulhas, bullock carts etc. At least nobody in urban areas asks consumers to make their own scooters or cooking stoves!
- Again the emphasis of technology developers for rural areas has been on catering for needs (with small improvement) rather than creating a demand. History shows that technological development has been fueled by creation of demand. And the watchword is convenience. Thus convenience is the vehicle of development. For example, a large number of developmental groups are working on making better chulhas. Feedback from the ‘better chulha’ program has not been very encouraging. Developers do not realize that chulha is still a chulha, even if it is slightly better. Every housewife, irrespective of the economic strata, which she comes from, would like to have the convenience of blue flame of a gas stove. There is a demand for it. Negligible work has been done on developing technology for producing blue flame from fuelwood and biomass residues.
- There is also a peculiar mismatch of groups with perception of, and those with resource for, rural technology development. Thus labs, especially National labs, who have resources, do not have any perception of the needs and demands of rural population. On the other hand, the grass-root NGOs who have the perception of the problem, do not have the technological resources to solve them.
- Again there is a mindset for simple technologies in rural technology developers. Why it is so, is difficult to comprehend when right in front of them are examples contradicting it. For example, bicycle which is the mainstay of rural transport is a complex piece of machinery and is manufactured in sophisticated plants all over the country. It has spread in every nook and corner of rural India because of the convenience of easy availability of spare parts and a large number of repair facilities. This kind of example should be followed in all rural technological development. Also no government subsidy is given for bicycle purchase. It stands on its own.
- Another interesting example of demand creation is the setting up of supermarkets in rural Maharashtra. These supermarkets in Taluka areas are similar (though on a smaller scale) to those found in western nations. These supermarkets are owned by local sugar cooperatives and because of their size and economic clout, these markets stock goods at cheaper prices than those available in the local bania shops. Besides, the variety of goods available is very large. These supermarkets in one shot have changed the perception of rural people and have created demand for better quality goods. The local bania shop could have been enough to take care of the needs but these supermarkets have created demand. In doing so they have helped in upgrading the life style of a certain section of rural population.
Below are possible solutions or the strategies for developing rural technologies and how best to propagate them:
- Rural technology development and propagation should be a consortium project. The members of such consortia will include industry, grassroot NGOs, researchers and workers. With industry in the picture right from the beginning, there is a scope for ensuring better sales efforts. An example will illustrate this point. Nimbkar Agricultural Research Institute (NARI) has developed an extremely efficient kerosene lantern capable of giving light output equivalent to a 100 W light bulb. Getting this technology marketed through various high volume consumer products groups is proving to be quite difficult. This was despite the fact that preliminary consumer survey data showed an overwhelmingly satisfactory response to the lantern. Generally the response of these consumer product companies was either NIH (Not Invented Here) syndrome or there was no perception of the market potential of this lantern. This could be because of the urban bias of these companies. If one of these companies was involved with NARI right from the beginning in developing this lantern, then probably these lanterns would have come in the market. The companies need to have a stake in the technology development to be serious about it.
- This consortium approach can be facilitated by organizations like CAPART. Thus in giving funds for any technology development scheme to an NGO, CAPART should insist on industry linkage. The problems of patent rights, royalty etc. can be amicably solved to the mutual satisfaction of all parties. A similar strategy needs to be adopted by other government organizations in their rural development programs.
- Once the industry linkage is established, then automatically the whole machinery of consumer demand creation comes into play. This includes high volume production, good quality products, media advertising, sales outlets and after sales service. No technology has successfully reached the masses without the above attributes and rural technology should follow the same evolutionary process.
- As discussed before, the vehicle of development is convenience. Rural technology development should take place with this as a major theme. There are a large number of cases where people are ready to pay a higher price for goods which give them convenience. Also associated with the theme of convenience is sophistication. Hallmark of evolution is size reduction and increased sophistication and complexity of systems. Technology developers should not shy away from complex and sophisticated technologies for rural areas. As long as these technologies are backed by good after-sales service, are convenient to use and are reasonably priced, they will spread rapidly.
- Till now most of the technologies have been borrowed from the west. They have been taken up in urban areas and then filtered down to rural areas. Some examples will highlight this point. Bicycle was designed to run on good roads. For rural roads there is a need to have simple shock absorbers and better seats. Similarly two wheelers (like Honda, Ind-Suzuki etc.) have been designed to run at high speeds and on good roads. Thus they are light and very unstable on muddy rural roads. There is therefore a need to develop technologies specifically for rural areas. Since the rural conditions are unique, they also require unique solutions. Besides most of the western technologies are energy intensive and will make the growth pattern of rural India similar to that of the West. With perennial resource constraint, it is in the interest of India to develop alternative routes. For example for Indian rural roads should have internal combustion engine running on alcohol. Besides, it should have the ability to carry high load at low speeds. No such engine exists since almost all the engine development technology has been based on the premise that these systems should run at high speed. The challenge to develop such an engine is tremendous and will tax the best brains, materials and technology.
- The spread of rural technologies will be facilitated if they also are employment generators. Thus high-tech agrobased industries can provide a possible solution. These industries will be in the areas of food processing, energy production (electricity producing plants running on biomass and ethanol production) and production of raw materials for chemical industries. Sugar cooperatives (which are chemical industries) have shown that in rural Maharashtra all round development takes place right from agriculture development to consumer items growth to increased employment around them.
Finally, it should be pointed out that in any such discussion about rural technology development and propagation, the question boils down to whom this technology is for. Most of the funding agencies and the participatory groups like NGOs would like to see these technologies benefit the lowest strata of the rural population. However, the economic situation of these people precludes any or little participation in this process. It is however possible that if the technologies help 250 million people (high market potential group) in rural areas, the whole process can snowball to include the poorest sections into the economic revolution. This vast rural market can produce whole economic systems which will span from manufacturing to service industries.