India's States

India, in many ways, looks like the European union. Each of the 28 regional states has its own language(s), culture, music, movie industry, food and festivals. This level of diversity is also seen in many other aspects, including in the economics and demographics. Here is a snapshot of the Indian economy and its demographics, wherein each state is treated as a separate country- in terms of three key aspects - population, GDP and per capita.



Now, there are states like Uttar Pradesh, which, if considered a country, would be fifth largest, more populous than Brazil; states like Haryana and Punjab that can claim to have income levels comparable to eastern Europe.

The social differences are more nuanced and a result of years of traditional values. For instance, Kerala (with a population the size of Canada), a welfare state in southern India, has social indicators in health and education that match developed nations, while, a large number of people who live in more prosperous states like Maharashtra, do not have access to clean drinking water, good health and education.

The future - where is India's diversity headed?

Despite the policy paralysis and lack of governance, India is on its way to grow at 7-9% per year in the long-term and is set to be the size of today's China in 10 to 12 years. Its share of services will be the highest at 70 per cent, industry at 20 per cent and agriculture at 10 per cent. By then, there will be more English-speaking people in India than anywhere else; a billion people connected to the internet; 7 out of 10 Indians will live in cities. Imagine a large, young, hyper-networked urban population with an average age below 30 years!!

In the short run, the Indian story shows signs of slowing down. There are also signs growth would be even less equitable, if the status quo remains.

Top-down structural changes are mired in politics, while at the same time, bottom-up structural changes are far more apparent. Just as millions of Indians in a way, leapfrogged land-line communication infrastructure and adopted mobile technology for voice and internet connectivity, people in states such as Rajasthan and Gujarat seem likely to bypass grid electricity via off-grid solar technology.

Indian companies like Tata, that made the Nano, design new products by holding cost as a primary constraint, some of which include a $20 water purifier or a $750 home with a solar roof. (less expensive than an iPad). And rapid adoption is more likely, as the need is much more pressing.

Given the Indian demand for home-grown high value, there is room for breaking old thinking, and using new business models that can potentially bring a large number of people at the bottom of the pyramid within reach of basic communication, power and infrastructure, education and health.

Evidence shows scalable models combining innovative product design with local expertise, can drive sustainable growth. Such innovation will help countries like India grow at a faster, more equitable trajectory. My bet is:  New models and product development  - keeping the "Indian aam aadmi" in mind, will go a long way in getting India its rightful place in the world..

Tinkering with MoDeLs

Wayne Gretzky, the best hockey player ever, said "a good player skates to where the puck is, a great player skates to where the puck will be."
In the Managerial Eco classes at Rotman, we tend to accept scarcity of resources by default. This helps : a) create generic economic models and b) simplify supply-demand functions. With the communication/info revolution, there is a shift, where tech innovation allows moving from scarcity to abundance.



History is filled with examples of things that were once special, expensive and sought after, but are now seen as just another commodity. From air travel to televisions to mobile phones to personal computers, value diminishes with  improvements, breakthroughs and economies of scale.


Now, more than ever, winning is about innovation and altering the model - tinkering with available models and coming up with new integrative models - redefining the game so that it favors your "home-field advantage" vs. anyone else's.

For instance, one approach is to lower the price and make it up in volume (examples include Walmart, Costco etc.). Infosys brought the flat world model, where any work is disaggregated and moved to the lowest cost, highest quality location. Recently, the game of cricket got a shorter version- IPL or the Indian Premier League, which now has huge fan following and admen queuing up for space. Google brought all information in the world to a search engine for free by turning the end-user into the product and the advertiser into the customer:

All these models show Einstein-like brilliance- so simple, yet nobody ever thinks about them.

The beauty of remodelling is that it holds immense possibilities. There is enough room for a thousand flowers to bloom!