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Technology as the Invisible Hand in India

It all started during Hell Week, when I was supposed to find a summer job, but wasn’t able to find something that really excited me. I looked into what the Social Enterprise Program offered and thought it would be an interesting and different path to pursue than my classmates. The program turned out to be a perfect match for me because I was able to combine my desire to do public service with an exciting job for an MBA student (including pay). I was on my way to India to implement the first phase of the SARI project.

The Sustainable Access in Rural India project (SARI) seeks to show that viable markets exist for information and communication services in rural poor areas by inventing and deploying innovative technologies, assessments, and business models. SARI is part of the Digital Nations consortium consisting of Harvard’s Center for International Development and MIT’s Media Lab in collaboration with the Indian Institute of Technology Madras.

Through the development and introduction of appropriate and enabling technologies and applications, SARI intends to foster economic development and improve health and learning. The project will wire approximately one thousand neighboring rural villages in each of two Indian districts so that they may benefit from a network effect in a financially sound way.

In rural India, most adults are employed as farmers or laborers. The farmer’s primary interest is how much he can obtain for his products. And while prices often differ across villages, the farmer only knows the local price. Even if the urban price is higher, he does not know to send his products to the city. Nor does he realize that it would be profitable to produce more. He misses opportunities to earn more income and urban consumers face prices that are higher than what they could be. By enabling farmers in their pursuit of customers with the highest willingness to pay, SARI can bring greater efficiency to the markets.

Another example of market inefficiency regards laborers in rural villages in India, where permanent employment is rare. On a typical morning, workers gather in the main plaza of the village and employers come by to hire them. Often, hours are wasted searching for brief employment opportunities, or worse, workers in one village may stand idle while employers in nearby villages can’t find help. More sophisticated technologies like networked computers could enhance matching and reduce search time – with a single click revealing job opportunities or prices in all relevant locations.

In both examples, IT delivered real economic benefits, farmers and workers earning more income. On a larger scale, the effects could be profound; a communication kisok in every village in the South of India could put daily income into the pockets of people who currently survive on less than two dollars a day. The only sustainable way to end deprivation is to enhance earning possibilities. We are seeing IT act as the “invisible hand” of the market, bringing effective help to the poor.
Besides the income related applications of SARI, the project will develop other applications that aim to improve villagers’ lives. For instance, many public health problems can be prevented or treated through information dissemination, often at a lower cost than treating the problem afterwards. Putting health clinics on-line could raise their productivity, possibly allowing for remote diagnostics where doctors or medical references are not available. And there are as many valuable applications for education, including distance learning, as well as applications for governance, community/social mobilization and commerce.

Non-profit organizations typically can’t afford to hire MBA students, but when they get one, they value their work very highly and give those students a tremendous amount of responsibility. In my case, I was one of three people responsible to start the project in the field and had a team of 30 in my charge. I learned more about team management and project implementation in one summer that in two years of consulting. Furthermore, I was able to spend ten weeks in India, which is a very mystical and wonderful place.

It was incredible for me to be in a completely different culture and to be so welcomed. The people I met and the time I shared with them were an incredibly important part of my summer in India. Without undermining the professional skills I gained, the individual reflections and personal learning I took away from the trip are experiences that I will always treasure.

Since 1982 the HBS Nonprofit and Public Management Summer Fellowship has provided financial support to current MBA students who choose to work in nonprofit and public sector organizations during the summer. Over the life of the program, over 350 students have participated in the program, with a record 48 students for summer 2001.

Sponsored by the HBS Initiative on Social Enterprise and the Social Enterprise Club, the Fellowship is funded by the School and alumni donors. The program has three principal goals:

* To enable students to take jobs in nonprofit and public enterprises where their HBS training will provide significant benefits to the organization and the community it serves;

* To expose students to the rewards and challenges of public and nonprofit management; and

* To enrich the HBS community and the quality of the MBA education by increasing the number of students with experience in the nonprofit and public sectors.

For more information, contact Margot Dushin, HBS Initiative on Social Enterprise, mdushin@hbs.edu, and see //www.hbs.edu/socialenterprise/summer/

February 19, 2002
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