Where there be challenges, there be opportunities. That is a mantra well-known to every entrepreneur. That immediately implies that India is truly the Land of Unlimited Opportunities. The challenges have been created by a persistent attachment to a certain way of thinking and doing. As Einstein astutely noted, the significant problems we face cannot be solved at the same level of thinking we were at when we created them. Translating the challenges into opportunities requires a different way of thinking.

How to address the challenges of rural India – and by extension, the challenges of India – has occupied some very sharp minds. Although, it would be immodest of me to claim that I have any special insight into the problems, I add my modest two bits into the ring for discussion whenever the occasion arises. That is what I did during the panel discussion on “Inclusive Economic Growth” at the Global Social Venture Competition at the Indian School of Business last week. (See the previous post on “Inclusive Growth“.)

My view is that the problem of rural development has to focus on the development of rural people, not the development of villages. Villages are not the proper object of analysis when it comes to economic growth, and hence economic development. By insisting on the development of villages, scarce resources, which could have been more efficiently used elsewhere, are wasted. There is another way of using the same resources, and that is the development of cities. It seems to me that the answer to rural development lies in urban development. Paradoxical but true.

About 70 percent, or 700 million Indians, live in villages. Clearly, there is no possibility of urbanizing them by migrating them to the existing cities which are already bursting at the seams. All of the major cities are little more than mega-slums. Practically all Indian towns and cities are unplanned and inefficiently use land and other resources. They are arguably inadequate for the current residents, leave alone adding hundreds of millions more people to them. The existing urban centers would do with a massive makeover but we cannot afford that. (Fires, earthquakes, carpet bombings have benefited many other cities in the past.) So there is clearly a need to have new urban centers to accommodate the hundreds of millions of people who need to be in cities for economic growth and development. And that is the greatest opportunity that India provides to everyone–people rural and urban, firms domestic and foreign, governments, NGOs, multinational entities . . . the list goes on.

Imagine building absolutely new cities from scratch for 600 million people. Imagine 600 new large cities of one million people each. Imagine building houses, schools, shopping centers, parks, factories, roads, public utilities, hospitals, libraries, . . . And now imagine doing that using the best urban planning known to humanity. Take whatever humanity knows about the best way to get things done, and use that to design and build cities that can develop and sustain the people for generations.

That is the greatest opportunity we have – of building from scratch – which is not available to any developed economy. Take for instance the US. US cities are the notoriously inefficient in terms of resource use and sustainability. Practically all Americans live in cities and if you were to build new, more efficient cities, you will have the greatest difficulty populating them because people will be reluctant to move from their home cities. Their legacy urban centers will burden the transition to living in more sustainable cities. Contrast that with India. Most Indians living in villages would love to have the chance of living in well-designed efficient cities.

Allow me to illustrate that last point with an analogy from a different sphere. The US had one of the best landline based telecommunications system in the world by the early 1970′s. That legacy system actually prevented them from transitioning to a more efficient mobile telephony system in the 1990′s. India, given that there was no landline telecommunications system to speak of, immediately leapfrogged the twisted copper-wire stage and went straight to the more efficient wireless system.

What I am proposing is a similar “urbanization leap” for the majority of Indians. Instead of futzing around in the margins with trying to make the villages a little better, take a bold step and create the world’s most efficient cities. I know, it is more than slightly crazy to say that we can do something that others have struggled with for many decades. But I submit that it is not only possible but also possible in a surprisingly short time. What we need to do is to think differently.

What we in India need is not so much hard resources as we need a bold compelling vision. We need the vision to look beyond the here and now, and see the future. If we have a bold, coherent, inspiring and realistic vision of the future, it will serve as the guide to purposeful action. I bet you are justifiably skeptical of my claim that we can work miracles. But I will argue in a future post how it can be done, and done with ease. Stay tuned.

[Continued at "The Urbanization Leap."]