Rubanomics: rural engines of growth

rubanomicsIt is easy to fall prey to stereotypes. Fed on a diet of popular culture we have grown up believing that Indian villages meant bullock carts, mud roads, fields, thatched huts and women carrying pots of water. This ‘rural’ picture is no longer authentic. We, at Head Held High Services, have looked long and hard at rural India and discerned a pattern of change that has enormous implications for India’s economy. We address this pattern as Rubanomics.

Rubanomics is the emerging economic trend driven by Rubans or rural-urbans, a new breed of rural populace with talent, spirit, aspirations and technological access comparable to their urban counterparts.

Rural urbans

The majority of India is rural. However, villages are undergoing a gradual and significant transformation largely driven by technological advancements. Those who ignore this wave of growth may lose the opportunity to tap into its immense potential.

rubanomicsA 2012 Credit Suisse report reveals that while 69% of India is still rural, agriculture now contributes only a fourth of rural GDP, down from half, a decade ago. This implies the rapid rise of other sources of livelihood namely manufacturing and services.

Roads, electricity and telephones have connected hitherto isolated rural areas to the rest of the world. The resulting tide of information has influenced the beliefs and aspirations of their inhabitants.

Growth in metros is slower than urban growth, implying conversion of villages into towns. In addition, areas with highest per capita output have lowest growth rates and vice-versa.

Rural consumption is increasingly imitating urban pattern with highest spending on durables, education and services.

Ruban DNA

There are four elements that constitute the DNA of Rubans:

Bridging of the digital divide with mobile and internet penetration: Over 32% of India’s mobile base of 680 million is from rural areas. Internet adoption has been rapid with penetration of claimed internet users growing from 2.6% in 2010 to 4.6% or 38 million in 2012, a CAGR of 73%.

Raw talent: There is no dearth of talent in rural India. However, quality education remains a distant dream for many. Relevant education, skill development platforms and opportunities can help turn around this discrepancy.

Entrepreneurial spirit: The spirit of jugaad, or making do with whatever is available, is deeply ingrained in every Indian’s chromosome. This trait is even more pronounced in rural areas where systems and processes are at best unpredictable. The National Innovation Foundation has recorded over 1,000 innovations that range from a solar mosquito killer to a cycle powered washing machine.

Aspirations: No longer isolated due to the advent of television, internet and mobile, the rural consumer now wants more. Passivity has been replaced by an aggressive stance. People want to improve their quality of life be it through better opportunities for livelihood or better products and services.

Elements of rural transformation

It is important to recognize the fortune at the bottom of the pyramid. Our social venture Head Held High Services is focused on driving rural prosperity by unleashing the potential of Rubans through platforms for talent transformation and employment creation. We are aiming to be one of the largest Indian rural enterprises by enabling the economic participation of two million Rubans over the next 10 years.

We are rolling out RubanShakti, a talent transformation platform where uneducated rural youth undergo a residential five-month training programme that converts them into English-speaking, computer-literate knowledge workers. Till date HHH has trained over 500 youth in three districts – Koppal, Gadag (Karnataka), and Anantpur (AP), generating jobs for 90% of its trainees.

We have also created district level RubanHubs, a platform that enables Rubans to deliver knowledge services from villages. These services include business processes for clients such as Genpact, Mphasis, and DIAC (UK), and tasks related to agriculture, health, financial inclusion, education, consumer and government services.

Synergy between the corporate sector, the Central Government, R&D establishments and non-governmental organizations is key to create an inclusive growth environment for rural India. Because, in a country where we espouse the principle of Vasudhaiva Kutumbakam or ‘one world one family’, how can we ignore our own brethren?

Madan Padaki

Madan Padaki

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