100,000 Entrepreneurs
India has so many people (1 billion or 100 crore) that even huge poverty reduction programs or development intiative just get lost in the sea of people. Hundreds of initiative are simply not enough and good samaritans trying to help a 1-2 people is barely noise.
As a diligent bootstrapper I tried to reduce the problem into manageable bites. India being still a family oriented society we can first reduce our population to 20 crore (200 million) families of 5 people each. Given where we are 1 earning member in each family would be a huge step forward. So we are talking about 20 crore jobs.
Let’s now assume that each high paid job supports 20 jobs by a multiplier effect. Just buying a car can create 15 jobs, similarly a cellphone, tourism, house etc all create positive economic activities. So don’t just imagine lowly service jobs in the multiplier but yes they will also have their share for some time. This reduces the problem to creation of 1 crore well paying jobs which create 20 crore more jobs (that’s a crore extra than target but who’s complaining). Let’s define a high paying job as that which allows the individual to buy a car, a house, a cell phone and take a vacation twice a year which is needed for our multiplier effect.
Now this reduces our problem to 100,000 entrepreneurs creating businesses which generate 100 well paid jobs. The numbers are now at least comprehensible and not mind numbing. But even now it is a huge challenge. To put the number in perspective all premium management institutes produce roughly 2500-3000 students a year of which most will become the high paid employees and not the entrepreneurs. A better hope is a statistic I heard that in any generic population are 2% entrepreneurs which is irrespective of caste, creed, education, sex, income levels. Here the numbers are in our favor – 2 crore potential entrepreneurs exist in India. Obviously we are interested in the subset which will create high paying jobs but the sample size is huge.
So actionables from this castle in the air aka khyali pulao? Create an environment where the 2 crore entrepreneurs can flourish. We can’t really predict which 100k will be the tops and like a typical VC should bet on all. Secondly, create that 1 crore pool of highly educated people which can be employed by these entrepreneurs. A more specific list could be
- Cheap credit for starting a business
- Reliable electricity to lower cost of operations
- Sponsor 10,000 teachers to study in the best universities like Stanford, Harvard, Oxford who have to sign a bond to come back and teach 100 students each year for 10 years. Will produce 1 crore fresh excellent students in 10 years. Cost of training these teachers – a paltry $1 billion (0.1% of our GDP) over 3-4 years.
Call this the bootstapper’s guide to killing poverty.
Ambarish Chaudhari said
Beautiful write up.
Can these action items for authorities be instead translated into a business plan for a large private player?
vinay said
# 3 – There have been programs in Indian where engineering college students have been sponsored to go to IIT’s for MTech and they had to come back and teach in the sponsoring college for 1-2 yrs. I read that most of them ended up paying the bond and taking up industry jobs after finishing their MTech.
Saurabh Chandra said
Thanks for the comments.
I think on the electricity front the 2003 electricity act has removed the legal bottlenecks facing the electricity sector but its only been 5 years and these things take time. Ditto for start up funding ecosystem which should address credit.
On point 3 I am more gung ho that its a solvable problem faster. For a large player it should also be possible to start a teacher staffing service where the company trains teachers (maybe including getting them oxbridge educated) and deploys them as consultants in colleges. I am sure a private company will work out the incentives or disincentives to retain the teachers much more effectively. This is also a loophole for a large college to create a profitable venture since in India education is a non-profit enterprise by law. Someone like Manipal could create this for-profit company and find itself as the first client easily making profits in white.
Prof. Sureshchander said
Ambarish Chaudhary is rightly looking for a private initiative. The governments can spend lot of money on buildings and land but little or none on human development.
Yes it is possible to have a business plan. The plan which is human and does not uproot the people from their soil and surroundings. Let us call it eDevlopment of Local Area (eDoLA)
A pilot project can be started with about Rs. 12 crores excluding the cost of land. This will sustain about 400 persons.
The structure is:
10 Nodes – A node will have a node facilitator.
Each node has 4 units. Each unit will be headed by
eDevelopment technopreneurs.
Each unit will have 10 eDevelopment Workers
These nodes will be at different geographical locations but not too far away. Each Node will be over an area of say 2 acres in a rural area.
Expected revenue generation:
All nodes
First year (After 2 years of training) 12 crores
Second year (After 2 years of training) 20 crores
Third year (After 2 years of training) 40 crores
It is expected that these nodes will generate interest in the local
population and even people from outside to set up their units around
these nodes. These units may work independently or in association with
the nodes under eDoLA.
Revenue from units likely to be set up outside eDoUA net with or without assistance from eDoLA
Third year (After 2 years of training) 10 crores
Fourth year (After 2 years of training) 50 crores
Fifth year (After 2 years of training) 100 crores
Sixth year (After 2 years of training) 400 crores
eDoLA will be run on a cooperative model in which each unit is independent and not a drag on others. Likewise more enterprising units can set their own pace.