SATURDAY, APRIL 20, 2024
When we speak of integration, we go further than mere inclusion; this can be temporary and end when the impulse stops. More and more personal diversity is valued, along with one’s ability, when in a team, to give his contribution of creativity and critical spirit.
Some engines which foster integration are reminded below:
1. Literacy. Much was said about the demographic dividend, which would be a great attribute of India. It only exists when the population has received basic instruction, and preventive and curative health care needed, with a wide range of jobs on offer, after good training for them. When there is no basic education, no health care available and no jobs, the dividend may become a nightmare! It is currently what we see in several countries in Africa, Asia and Latin America….
So important is to provide and take care of a good quality compulsory education. It must lead all children to think logically and express themselves with clarity. After that, each child, with the support of the family, will choose to continue his studies, following his inclination.
Very indispensable today is technical-professional training, as there are abundant jobs in these fields, offering good wages. It is foreseeable that they will continue to exist in the future.
Quality instruction, for all children without exception, is a must. It is the base from which they can aspire to go further. It is the most important factor of social integration and gives the capacity to take advantage of further opportunities to learn and advance.
Other elements enhance integration and give continuity to the relationship with others. Certain differentiating accessories can be overcome.
2. Telecommunications. India had a fast growth in telecommunications from the beginning of this century, covering all strata of society. They became a democratic, instant, means of relation, not needing additional formalities. And the more you contact and communicate with people, the more any social or psychological distance becomes blurred. The frequency of contacts makes you closer and at the same level as others.
In 1995, India had around 5.3 million ground lines. After the independence and until shifting from the Soviet-type economic model to the free initiative one, the telephone was seen as a super-luxury item, only for the rich people and the politicians.
When PM Vajpayee opened the sector, a large number of operators entered, practically all wanting to. 4 operators were admitted for each of the 4 Metropolitan Areas -Delhi, Mumbai, Kolkata and Chennai-, and in the 18 districts into which the country was divided, 4 operators entered each. This brought great agility on the part of the operators, quite the opposite of what previously happened, under the shadow of the politicians, where entrepreneurial merit did not count, but only his relationship.
After the first steps in choosing technologies and preparing to launch the mobile system, the leading technology operators were able to reduce the costs, passing the benefits on to the utilizer; and trying at the same time to lower the acquisition costs of mobile lines.
Every small drop in prices entered a large volume of new subscribers, who now could enjoy the benefits of a telephone. Healthy competition made other operators try to lower their prices, with a net increase in the number of subscribers.
In telephone communications, both the eager search for technological applications by operators and the growing volume of users made possible the lowest costs in the world. Therefore, there are currently more than 1,185 million active mobile lines and around 22 million ground lines. And the telephone system is one of the cheapest: in general, for 3,2 euros a month, you can make and receive all calls within the country, more than 200 daily SMS and 1,5 Gbits of data/day.
In all countries where telephones are prepared, in addition to talking, bank transfers and bill payments are possible. This gives a sense of mastery over technologies, which reinforces self-esteem and makes it easier to contact others to confirm payments and receipts.
3. The Fortune at the Bottom of the Pyramid. Professor C K Prahalad invented the concept that Indian entrepreneurs anticipated in its application. The basic needs of the rich and the poor are similar. Innovative products were usually thought for rich buyers; but the poor also need them, provided they are affordable. For example:
- A company packaged shampoo in small sachets, for only one use, at ridiculously low prices. It had high sales, as everyone with less possession bought it, while the rich bought bottles for repeated use, for months.
- One detergent company launched a Nirma branded product, in small packages and with less fat, as poor people wash their clothes in rivers. Less fat pollutes the rivers: another great sales success, because of a huge number of buyers.
For such companies, even when they earn very little in each package, their revenues and profits are satisfactory on the whole. And poor people do not feel excluded from satisfying their needs as do affluent people.
4. Economy of scale. It is present wherever the production is in a high number of units. When producing 10 items, one unit costs on average much more than producing 1 million of them. This fact is overwhelmingly present in India with a large population eager to buy the most necessary products for everyday life, may it be food, clothing, drugs, telephone, etc.
In pharmaceuticals, this is pretty clear: when produced in large quantity, the cost drops and it is easy to export, mainly with the FDA certification. Exporting further lowers the costs of production as the quantity is bigger. India was known as the pharmacy of the poor, due to low prices. However, today it is also the pharmacy of the rich since no one wants to pay unnecessarily more.
In 2001, the President of CIPLA Laboratories (based in Mumbai) announced the sale of its product for HIV for $1/day, that is, $365/year. He did it in London, to make a bigger impact. Protests of all the Multinationals poured in, as they were selling their product for $10,000/year, composed of 3 different pills daily.
He didn't do research but paid royalties to those who had discovered the product. And instead of 3, he put everything in one pill only, to make it easier the take. Interesting to note that at the time of the announcement, there were 200,000 users of the MNC products. Now that there is also support from Foundations, the price came down and more than 6 million use it!
The titles nos. 3 and 4. are interrelated. Where there’s one, the other is present too. But in no. 1, Literacy, including compulsory Instruction is by far the one breaking down the barriers of all nature and making coexistence very natural and spontaneous. It is the most powerful engine driving social integration.
(The author is Professor at AESE-Business School (Lisbon), at IIM Rohtak (India), and is the author of The Rise of India)
