“Can India Afford its Villages?” is the title of an opinion piece in today’s livemint.com (a joint HT and WSJ newspaper). The subtext says, “The answer to the problems of our rural economy paradoxically lies in urban development.” If you have been reading this blog for a bit, you would immediately suspect that I wrote that piece. Partly so. I co-authored the piece with Reuben Abraham.

Well, well, what do you know! Just as I had finished a series on why India needs to have cities for its economic growth and therefore development (see the last post in the series, Make No Little Plans), my friend Alok pointed me to a Scientific American report dated 17th April by Nikhil Swaminathan titled “If You Can Make it There… Cities Are the Greatest Generators of Innovation and Wealth.” He writes of a study that “finds increased social interaction of urban life fuels leads to a more productive populace.”
I …

Think Big
There is something in the nature of the world that it is sometimes paradoxically more difficult to make small changes than to make big ones. Logically consistent big changes are more likely to succeed because of the interconnectedness of the world.

Flashback (Part 2)
“It began with a simple realization that no one is as smart as we are. That is, a collection of very smart people is smarter than any one person however smart. Experts and expertise matters, and therefore amateurs and novices cannot be as good in figuring out the choices that confronted them. The collective wisdom of a group of smart people articulated a vision and an associated roadmap.”

Flashback
The year is 2020. For nearly 12 years, India has seen an average annual GDP growth rate of over 12 percent more than quadrupling the per capita GDP from US$500 in 2008 to $2000, placing India in the league of middle-income economies. Stark poverty is a thing of the past. In much less than a generation, the population transitioned from being 70 percent rural to being less than 20 percent rural. Agricultural labor is only 15 percent of total labor participation, down from 60 percent in 2008. Farm incomes are …

“Pune DeCi” is a designer city started in 2010 and completed by 2016. Just 30 kilometers outside the old city of Pune, about 100 square kilometers of land was acquired. The government of Maharashtra, the state where Pune is located, was a partner in the “Pune DeCi Development Authority” and had a stake of 20 percent in the project for which it supplied all the land which was basically non-prime land. Long term bonds raised the approximately $1 billion initial investment required for the first improvements.

When I first moved to the US, I was struck by the phenomenon of shopping malls located far away from the city, about an hour along some highway. Land, it occurred to me, was cheap outside the city and what they did was to build these huge malls that were in some sense islands of urban activities in the middle of rural areas.

Sramana Mitra looks beyond Bangalore. She writes:

Cities are engines of growth because they “manufacture” wealth. That is why rich economies are predominantly urban, and those economies that are largely rural are poor. Therefore the transition from a poor economy to a rich one depends on the transition of the majority of the population from being rural to urban. The scale and quality of the basic habitation unit determines the success of an economy. A large number of small villages is sufficient for poverty; a number of large cities is necessary for prosperity. Economic growth is both …

“If you believe that the money exists for building amazing futuristic cities in India, you must be certifiably insane.” That is the standard reaction to my scheme for building 600 cities for the 700 million Indians currently trapped in 600,000 villages. Where will the money come from? My answer is simple: out of thin air. That’s when they suddenly remember that they have an urgent appointment with their hair dresser or chiropractor.

Planning is uniquely human. Planning shapes not just human institutions and artifacts but indeed creates the future that is unknown and unknowable. Granted, the best laid schemes of mice and men, often go awry, as the poet lamented. When it comes to central planning, or planning by an all-powerful government bureaucracy, you can say that those schemes are guaranteed to go awry.

Creating a compelling vision which has the power to inspire is the first step to economic growth and therefore towards development. We have to imagine the future state first before we can make it a reality. Imagine that instead of 600,000 tiny villages, the same 700 million people were living and working in cities. Imagine that we had 600 cities with around a million people each on average. Let’s call these “Designer Cities” or DeCi (pronounced “desi.”)

Isn’t it astonishing that 2,600 years ago, when most of the world was living in tiny little human settlements, the Indus Valley civilization had well-planned cities of Harappa and Mohenjodaro?
“Some of these cities appear to have been built based on a well-developed plan. The streets of major cities such as Mohenjo-daro and Harappa were paved and were laid out at right angles (and aligned north, south, east or west) in a grid pattern with a hierarchy of streets (commercial boulevards to small residential alleyways), somewhat comparable to that of …

Here is the slide set I used at ISB on the 9th of March. The background reading material starts off with “Inclusive Economic Growth.”

Two fish were swimming along a stream when they come upon a third fish which remarks, “The water is absolutely fine today.” The two carry on without a reply. Later upstream one of them says to the other, “What the heck is water?”
Talking fish is not the point of the little story, of course. I find it remarkable that we often miss what we take for granted, and don’t question what we are perpetually immersed in. What explains the unreasonable success of cities is not something that we ponder …

Economic growth is an imperative if the widely discussed goal of development has to be achieved by India. There are a number of well-known causative factors that lead to economic growth. Among them are an educated and healthy population, reliable and adequate infrastructure, a free and fair market-driven economy, and the availability of public goods such as law and order, political freedom, efficient governance, etc. These causative factors have complex interdependencies and have to be present–simultaneous in time and co-located in space—for economic growth, and consequently, development. Even after a …

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.

Where is India today? How did it get here? Where should India be going? And how should it get there? These are the big questions that I try to grapple with. And that is how I began my presentation.
ISB at night [source]
Recently I was on a panel discussion titled “Business Strategies for Inclusive Economic Growth” held during the semi-final round of the Global Social Venture Competition at the Indian School of Business in Hyderabad on the 9th and 10th of March. The panel–moderated by my friend Dr Reuben …

India has been singularly unlucky in the sense that its movers and shakers don’t seem to get what it takes for the economy to prosper. Therefore it comes as a terribly pleasant surprise when one comes across a M&S who apparently gets it. Not only does the man get it, he gets it in spades and how.
Mukesh Ambani apparently gets it.