I’m actually posting this blog while enroute to Toronto from a one- week trip to India. In seven days I was in Mumbai, Pune and finally Bangalore. The Indian companies I have met with continue to be very confident, and feel that 2010 will be a breakout year.
The most striking and memorable meeting on this trip has been a meeting I had in Bangalore with a friend of mine who about a year ago started a Trust that invests in rural-based start-ups. The venture, NextWealth, has now been operational for about six months, and already the implementation of the vision has been staggering.
The premise of the venture is that in India today there are hundreds of accredited, private engineering colleges that are situated in Tier 3 towns and villages. A large proportion of these are actually in the four southern states- Tamil Nadu, Andhra Pradesh, Kerala and Karnataka. All of these have enrolments of hundreds of students, but the prospects for a job after graduation are slim, unless the student moves to a neighbouring city. This of course poses multiple challenges;
- The burden on a city’s infrastructure increases significantly.
- Tier 3 towns and villages are hollowed out, where the brightest go to the city.
- The family structure is changing, since traditionally in India as parents grow older, children take care of them.
NextWealth, founded by Dr. Sridhar Mitta, addresses many of these concerns by providing a good salary for graduates that remain in the towns and villages, and actually do work that has both a manual and automation component for Indian and foreign companies headquartered in adjacent cities.
Everyone in the value chain is a beneficiary:
- The graduate has a job close to home, and is able to help support the family, while utilizing his/her acquired skill sets.
- The towns and villages benefit since now there are healthier families, contributing to their growth.
- The city-based companies have a cost-effective, captive labour pool, since salaries in villages are about 30% of what is paid for an equivalent staff member in a city. Attrition is also comparatively much lower in rural areas than cities.
- The end customer benefits by having service providers that are highly motivated to deliver their solutions on time, and are also very willing to customize their services for fees that cannot be matched in a city environment.
This is the next wave of entrepreneurship in India, where successful entrepreneurs in the for profit sector are now targeting the reform of job creation and the overall well-being of towns and villages, while also making a healthy profit and creating significant value for all stakeholders.
Hari is a seasoned entrepreneur with over a dozen years of experience in building and exiting businesses in Canada, US and India.