Development, Democracy, and the Village Telephone

by Sam Pitroda

Reprint 93611

Harvard Business Review

Copyright Q 1993 by the President and Fellows of Harvard College. All rights reserved. HARVARD BUSINESS REVIEW November-December 1993

I was born in 1942 and raised in a poor village in one of the poorestareas of rural India, a place withkerosene lamps and no running wa-ter. In 1980, at 38, I was a U.S. citi-zen and a self-made telecommunica-tions millionaire. By 1990, I was 47years old and nearing the end ofnearly a decade back in India as lead-er of a controversial but largely suc-cessful effort to build an Indian in-formation industry and begin theimmense task of extending digitaltelecommunications to every cornerof my native country, even to vil-lages like the one where I was born.

That effort persists today at an in-creased pace, but it remains contro-versial. Some of the controversy hascentered on me and my methods.Most of it focuses on the efficacy andlogic of bringing information tech-nology to people who are in globalterms the poorest of the poor.

Common sense and acceptedthinking about economic develop-ment have long held it ridiculous tosupply Third-World villages withstate-of-the-art technology. Whatsubsistence farmers need is not

high-tech science and complex sys-tems, the argument goes, but im-munizations, basic literacy, disease-and drought-resistant cereals andoilseeds, simple pumps, deep-droptoilets, two-phase electrification –all the “appropriate” technologiesthat the unsophisticated rural poorcan use and understand.

I agree with this argument as far asit goes. Third-World farming villagesneed water, hygiene, health, and pow-er, and the need is usually great. But the argument falls short in itsdefinition of “appropriate.” It ig-nores technology’s profound socialimplications. And it comes danger-ously close to consigning the Third-World poor to a life of third-ratecapacities and opportunity. The poli-cies of development agencies likethe World Bank too often limit “ap-propriate technology” to the two-dimensional, twopenny solutionsthat bring the poor to the doorway of the modern world but not actual-ly across the threshold.

For me, three facts about Third-World development stand out withgreat force. First, high technology is

already an essential element in ef-fective water sourcing, sanitation,construction, agriculture, and otherdevelopment activities. Geohydro-logic surveys are carried out fromsatellites. Bioengineering has revo-lutionized crop production. Appro-priate technology has moved wellbeyond the water screw and the in-clined plane.

Second, modern telecommunica-tions and electronic informationsystems are thoroughly appropriatetechnologies even in those regions ofthe world that still lack adequatewater, food, and power. The reasonis simply that modern telecom-munications is an indispensable aidin meeting basic needs. If a U.S.community needed, say, widespreadimmunizations or replacement of apower grid, would the telephoneseem a vital or an irrelevant tool ingetting the job done? Would the tele-phone seem more or less critical ifthe job were tied to a natural calami-ty such as flood or drought and re-quired the mobilization of diverseresources over a broad area?

Third, as a great social leveler, in-formation technology ranks secondonly to death. It can raze culturalbarriers, overwhelm economic in-equalities, even compensate for in-tellectual disparities. In short, hightechnology can put unequal humanbeings on an equal footing, and thatmakes it the most potent democra-tizing tool ever devised.

In 1942, the village of Titilagarh inthe Indian state of Orissa, southwestof Calcutta, had a population of6,000 or 7,000 and no electricity or

W O R L D V I E W

Development, Democracy, and the Village Telephone

by Sam Pitroda

Modern telecommunicationsmakes as big a difference to theThird-World poor as literacy orhigh-yield agriculture.

Sam (Satyan) Pitroda was born andeducated in India and had a suc-cessful career in digital switchingtechnology in the United States(where he holds more than 50patents) before returning to India tobecome an adviser to the primeminister of India on National Tech-nology Missions and eventuallychairman of the Indian TelecomCommission. He is an originalmember of the World Telecommuni-cation Advisory Council of the In-ternational TelecommunicationUnion in Geneva.

DRAWINGS BY NARDA LEBO 3

telephones. My early education tookplace in one-room schools, and mostof my classmates had no shoes orbooks. My family was of the sutharcaste – lowly carpenters – yet my fa-ther was an ambitious man. He nev-er learned English until I broughthim to the United States to enjoy hisretirement, but he did business withthe English and used what opportu-nities he had to build a prosperoustrade in lumber and hardware and to send most of his eight sons anddaughters to high school and on touniversity. For 12 years, I lived withone or more of my brothers and sis-ters in towns and cities far fromhome and studied hard to get thekind of grades that would outweighmy origins. In 1964, I succeeded. Iwas only 21 years old, and I had nev-er used a telephone. But my mastersdegree in physics, specializing inelectronics, from Maharaja SayajiraoUniversity in the city of Baroda inGujarat state, gave me membershipin a new technological caste that su-perseded the one I was born to.

My older brother and I decidedthat I should apply to a university inthe United States to do postgraduatework, and my father readily agreedto give me $400 toward this educa-tion, expecting me in return to bringmy brothers and sisters to the Unit-ed States one by one as I made myway in the world. I applied to theUniversity of Oregon and the IllinoisInstitute of Technology but did notapply for scholarships, on the theorythat an expression of need might re-duce my chances of getting in. I wasaccepted at both schools and choseIllinois. The state of Orissa gave mea travel grant of $600, just enoughfor a taste of every form of transport:a boat to Genoa, a train to London,an airplane to New York, and a Grey-hound bus to Chicago.

I arrived in December, 1964, withmy father’s $400 in my pocket. Tu-ition for the first semester was $700.I paid half on account, found a cheapapartment to share with another In-dian, and landed a job in a physicalchemistry lab to earn my keep andthe rest of my tuition. A year later, Ihad a master’s degree in electricalengineering. I had not only learned touse a telephone, I had, in essence,

learned to make one. More impor-tant still, I had learned enough to de-sign an electronic telephone switch.

Telephone switching is what oper-ators used to do by hand in the earlydays of the century. Using a boardwith cords and plugs, the operatorcreated a manual connection be-tween the telephone in the caller’shand and the phone being calledacross town. Voice transmissionthen took place by means of analogelectrical signals derived from a vi-brating diaphragm in one handsetand translated back into soundwaves in the other. The system wasmarvelously sim-ple, but, by tech-nological stan-dards, dreadfullylabor intensive. If all the calls inthe United Stateswerehandled thatway today, everyU.S. citizen would have to be a tele-phone operator.

Fortunately, electromechanicalswitching appeared in the 1920s, al-

lowing the system to locate and con-nect two phones entirely by meansof electrical signals opening andclosing metallic contacts. Theseswitches were automatic, but theyhad moving parts, and any devicethat moves wears out. So, while theyrequired no operators, they did needpeople to carry out routine mainte-nance and regular replacement.

Finally, in the 1960s, I myself wasinvolved in the invention and evolu-tion of digital electronic switchingequipment, which has two huge ad-vantages over its analog predecessor.First, without moving parts and ableto perform its own automatic main-

tenance, it never wears out. Second,it uses microchips as its basic build-ing blocks and therefore takes upvery little space. A large metropoli-

W O R L D V I E W

Telecommunications wasnot closing but wideningthe gap between the FirstWorld and the Third.

4 HARVARD BUSINESS REVIEW November-December 1993

tan switching station for 50,000phones once occupied a six-to-ten-floor building and needed hundredsof people to keep it operational. Thesame capacity can now be housed inone-tenth of the space and requires astaff of perhaps ten people to operateits computer and software controls.Indeed, the only serious remainingdrawback is that digital switchesstill produce heat and must be air-conditioned to prevent overheating.

Over the next few years, I workedfor GTE in Chicago, designing andrefining digital switching equip-ment and analog-to-digital conver-sion technology. I was responsiblefor nearly 30 patents and enjoyed aprominent position at GTE’s annualpatents banquet in the late 1960sand early 1970s. I married an Indiangirl I had met at the university inBaroda, started a family, brought myparents and most of my brothers andsisters to the States, and began to be-come a middle-class American.

But my father kept telling me Iwas too young to get into the habit ofworking for other people, and I wasbeginning to tire of pats on the backfor the patents I’d won, so I quit. In 1974, with two local telecomentrepreneurs, I founded WescomSwitching Inc. – their money, mytechnical expertise – and we beganmanufacturing digital switchingequipment that I designed. In 1980 –six years and more than a dozenpatents later – we sold out to Rock-well International. As part of thedeal, I agreed to work for Rockwell

for three years and undertook not tocompete in telecommunications forfive years. My 10% of the companycame to roughly $3.5 million in cash.

I left Titilagarh in 1951 to go toboarding school in Gujarat; I left In-dia in 1964 to go to graduate school

in the United States; now, in 1980, Iwas a millionaire, and to my ownsurprise I felt nearly as much guilt as satisfaction. All my life, I haddreamed of wealth and success, butnow I suddenly confronted the factthat I had walked out on India. Thesheer immensity of India’s prob-lems, the huge gap between my lux-urious U.S. suburb and the strug-gling poverty of villages like the onewhere I was raised, the selfishness of my own success so far, all of itweighed on my mind and set me offin pursuit of another Americandream: the exploration of a new fron-tier and challenge. In my case, thatchallenge was to use telecommuni-cations as an agent of change – abridge between the First World andthe Third.

As I began my new job as vice-president at Rockwell, I began ob-serving telecommunications atwork in underdeveloped countries.What I saw disturbed me. On thewhole, telecommunications was notso much closing as widening the gapbetween the rich countries of thenorth and the poor countries of thesouth. The First World, inventingand deploying new technology as ifit were fast food, seemed headed in the direction of unlimited anduniversal information access. Evenin the Second World, informationtechnology had penetrated farenough to destroy the informationmonopoly that supported totalitari-anism and to launch Eastern Eu-rope toward the West. However, in

the Third World,te lecommuni -cations and in-formation tech-nology remainedan urban luxury,and an unreliableone at that. Indiahad fewer than2,500,000 tele-phones in 1980,

almost all of them in a handful of ur-ban centers. In fact, 7% of the coun-try’s urban population had 55% ofthe nation’s telephones. The coun-try had only 12,000 public tele-phones for 700,000,000 people, and97% of India’s 600,000 villages hadno telephones at all.

What was worse, India, like mostof the Third World, was using itspriceless foreign exchange to buy the West’s abandoned technologyand install obsolete equipment that doomed the poor to move liketelecom snails where Europeans,Americans, and Japanese were be-ginning to move like informationgreyhounds. The technological dis-parity was getting bigger not small-er. India and countries like her werefalling farther and farther behind notjust in the ability to chat with rela-tives or call the doctor but, muchmore critically, in the capacity to co-ordinate development activities,pursue scientific study, conductbusiness, operate markets, and par-ticipate more fully in the interna-tional community.

Worse still, I was perfectly certainthat no large country entirely lack-ing an indigenous electronics indus-try could hope to compete economi-cally in the coming century. Tosurvive, India had to bring telecom-munications to its towns and vil-lages; to thrive, it had to do it withIndian talent and Indian technology.In other words, there were two goalsto work toward: telecommunica-tions and other information tech-nologies could not only help Indianscreate wealth in every walk of life, a telecom and information industrycould also create wealth of its own.Unless we had both, we had no fu-ture as a nation.

Worst of all, I began to see that in-formation technology played an in-dispensable role in promoting open-ness, accessibility, accountability,connectivity, democracy, decentral-ization – all the “soft” qualities soessential to effective social, econom-ic, and political development. In-dia needed the capacity to networkpeople, ideas, and initiatives. Tele-communications was as critical andfundamental to nation building aswater, agriculture, health, and hous-ing, and without it, India’s democra-cy could founder.

I began looking for an entry intoIndian telecommunications, a rigidbureaucracy with about a quarter ofa million employees: one for everyten telephones.

W O R L D V I E W

To survive, India had tobring telecommunications toits villages. To thrive, it had

to do so with Indian talent and technology.

HARVARD BUSINESS REVIEW November-December 1993 5

In 1981, a friend in Bombay sentme a newspaper clipping reportingthat Prime Minister Indira Gandhihad set up a high-level committee to review telecom development. Iwrote to its chairman and asked foran interview. From my name andlocation, he concluded that I was an Italian-American with telecomproducts to peddle. I wrote back atgreater length to say I had nothing atall to sell except the conviction thatIndia possessed all the talent neces-sary to pursue telecommunicationsmodernization on her own. He invit-ed me to India. He could not abso-lutely promise me an appointment –and I would have to pay my own way – but he did ask me to come. Ultimately, I spent two hours withthe entire high-level committee.

My message was that India shouldabandon electromechanical switch-ing and move immediately towarddigital systems for switching andtransmission. My reasoning wastwofold. First, electromechanicalswitching was ill-suited to the Indi-an climate and to Indian conditions.With few available telephones, mostlines were intensively used, andelectromechanical equipment wasmuch more likely than digital tomalfunction from overuse. (We laterdiscovered that some public phonesin India generate as many as 36 callsper hour at peak volume, comparedwith maybe 10 to 12 in the UnitedStates.) Electromechanical switchesare also more vulnerable to dust andmoisture. Analog transmission, fi-nally, suffers over distance, whiledigital transmission is what givesthose astonishingly intimate con-nections halfway around the world.In a country with low telephonedensity like India, distance – andtherefore static – were nearly un-avoidable.

Second, the development of digitaltechnology would help build nativeindustries in electronics, software,and related fields. Moreover, Indianeeded one piece of digital equip-ment that no other country manu-factured but that many developingnations could use: a small rural ex-change. In the United States and Eu-rope, the smallest exchanges builtwill accommodate 4,000 to 10,000

lines, and, in small towns and ruralareas, these exchanges are installedand then deliberately underutilized.This kind of waste may be tolerablein a country where the number ofsmall exchanges is tiny. In India, ex-changes with a vast overcapacitywould have to be installed in hun-dreds of thousands of villages, andwaste on such a scale was unthink-able. Development of an efficient ex-change for 100 to 200 telephoneswould not only solve India’s prob-lem, it would give the country a valuable high-tech export.

Thecommitteewas impressed –by my enthusi-asm if nothingelse–and suggest-ed I meet the prime minister.Two weeks later, Mrs. Gandhi’s of-fice agreed to give me ten minutes ofher time. Because I needed at leastan hour to get my message across,however, I turned the offer down.New Delhi was full of people whohad been waiting years to get tenminutes with the prime minister,but I really did need an hour. Bypushing what few connections Icould muster, I eventually got mybackground papers into the hands oftwo advisers to Mrs. Gandhi’s sonRajiv. One of them spent severalhours studying the file, and inNovember, after five months of try-ing, I got an hour with Mrs. Gandhi,her senior cabinet colleagues, thechief ministers of several Indianstates, and Rajiv, whom I met for the first time that day but who wasalready an advocate for my point of view.

I began my slide presentation al-most as soon as Mrs. Gandhi walkedinto the room. There was a lot ofground to cover, and I covered it asswiftly as I could. I summarizedworld telecom statistics and corre-lated telephone density to produc-tivity, efficiency, prosperity, andgross national product in about 50countries. I pointed out that only ahandful of countries had achieveduniversal service and raised the pos-sibility that it was not so muchwealth that created telephone densi-

ty as telephone density that createdwealth. I reminded them that Indiantelecom was characterized by highunsatisfied demand, low accessibili-ty as well as density, poor connectiv-ity, lack of dependability, substan-dard maintenance, superannuatedtechnology, overcentralization, bu-reaucracy, bad management, andlimited capital. I underlined India’sreliance on imported equipment oftraditional, not to say obsolete, de-sign, and tied that equipment to poorservice and system inflexibility. I

laid out a program that emphasizedrural accessibility, customer service,digital switching, and large-scaletechnological innovation and inte-gration, all of it accompanied by pri-vatization, deregulation, and organi-zational restructuring. I outlinedplans for design, production, instal-lation, networks, fax, E-mail, telex,and more. At the end, I spoke of re-sources and management and thenoffered three alternatives.

The first alternative – obviouslyunacceptable – was to do nothing atall and let the system limp along un-til it failed completely. The secondwas to pursue the present develop-ment plan, using imported technolo-gy to address some problems and ig-nore others. But the present policiesmeant that India would fall steadilyfarther and farther behind the devel-oped world, with dire consequencesfor India’s economy, government,and people.

My third alternative was to adoptradical new technologies, products,and programs, hire new people – inparticular, a core group of young re-search-and-development engineersto develop new hardware and soft-ware – and set India on the path touniversal telecommunications ac-cessibility by the turn of the centu-ry. I suggested the creation of neworganizations with the power to is-sue bonds and sell stock to raise

W O R L D V I E W

I wanted to set India on thepath to universal telephoneaccessibility by the turn of thecentury.

6 HARVARD BUSINESS REVIEW November-December 1993

massive sums of capital. I talkedabout large-scale manufacturingplants to meet domestic and exportdemand. I proposed a telecom com-mission to oversee regulatory re-quirements. I spoke of the need for a generational change in telecommu-nications thinking.

Prime Minister Gandhi listenedattentively to the entire presenta-tion, and when it was over, I an-swered a number of questions. In thedays that followed, the word wentout that the prime minister was in-terested in a plan to modernize Indi-an telecom, and I began three yearsof commuting between Chicago andNew Delhi to put together a strate-gic framework, plan the program,give shape to an R&D entity for de-veloping human resources and newtechnology, and lobby it all throughIndia’s parliament and intricate gov-ernmental bureaucracies.

Living in the United States for themost productive years of my life hadaltered my values and perceptionsbeyond recognition. My approach tobusiness, and for that matter to life,had become performance oriented.But every few weeks I left Chicagofor New Delhi and a set of standardsand values that were feudal, hierar-chical, and complex beyond belief.From my now thoroughly Americanpoint of view, India was in desperateneed of modernization. And myfrustrating efforts to install some ofthe modernizing mechanisms onlyunderscored how badly the country

needed technology to organize, sim-plify, economize, and create the in-frastructure to meet basic humanneeds. I saw so much potential fortechnology’s problem-solving capac-ity that even as I struggled throughquagmires of social and politicalconfusion, I was near to drowning inideas and excitement.

Through all of it, Rajiv Gandhiwas my ally. I saw in him a young,

energetic, modern man, direct andhonest, eager to explore telecom’srole in Indian development. He and Ihad clicked at our first meeting andquickly became friends. Over thenext few years, we fought togetherfor dozens of administrative experi-ments and reforms using informa-tion technology – computerizationof railways, for example, and of landrecords, which was vital to theprogress of land reform. At the mo-ment, however, we worked togetherfor the creation of the Centre for De-velopment of Telematics, C-DOT asit came to be known.

The battle was uphill. Every im-portant decision had a political as well as an economic impact.

For example, afew months aftermy meeting withMrs. Gandhi, In-dia signed a dealwith a Frenchmultinational tomanufacture a

digital switching system, so thosewho stood to profit from this ar-rangement opposed our concept ofan indigenous digital industry andlabeled it redundant. One EuropeanCEO wrote a strongly worded letterto Mrs. Gandhi pointing out that hiscompany had already spent $1 bil-lion developing digital technologyand questioning the wisdom of somassive an investment by the Indian

government. Given India’s limitedresources and the vast needs of itspeople, that argument had wide po-litical support.

In 1984, the breakup of the U.S.Bell System set in motion a processof deregulation and privatizationaround the world and gave our pro-posals the extra boost they needed.In August, C-DOT was registered asa nonprofit society funded by thegovernment but enjoying completeautonomy. Parliament agreed to giveus $36 million over 36 months todevelop a digital switching systemsuited to the Indian network. An ex-ecutive director was appointed, wefound five rooms in a rundown gov-ernment hotel, and we went to workusing beds as desks.

A few months later, in October,1984, Indira Gandhi was assassinat-ed, and her son Rajiv became primeminister. He and I decided that Ishould press the initiative for all itwas worth. Since I could not simplypull up stakes and move to Delhi –back in Chicago, my father wasdying of cancer – I began spendingabout half my time in each city. I didnot finally move to India with mywife and children until August,1986, after my father’s death. In themeantime, I continued to commute,now more often than ever.

From 1984 on, I was a principal ad-viser to C-DOT with a salary of onerupee per year, an arrangement I

W O R L D V I E W

In order to attract more customers,entrepreneurs set up publictelephones on tables in bazaars.

Every few weeks, I flew to aculture that was feudal and

complex beyond belief.

HARVARD BUSINESS REVIEW November-December 1993 7

modeled on Roosevelt’s dollar-a-yearmen during the New Deal. I wantedthe chance to work for a cause, an In-dian cause in particular, and I knewthat in order to succeed, I had toplace myself above the suspicion of

greed or self-interest. In any case,what could I have earned? The topgovernment salary at that time was5,000 rupees per month – then about$400 – and I was spending more thanten times that amount of my ownmoney just on plane fare and hotels.In any case, it was an arrangementthat no one in New Delhi under-stood. One day the deputy ministerfor electronics took me aside andsaid, “Mr. Pitroda, what is it you re-ally want out of this?” My answer,“Nothing,” puzzled him. Whetheror not he believed me, my motivesremained a subject of discussion inNew Delhi for the next six years,with eventual dire results for me.

For the moment, however, activi-ty was bliss. Our engineers wereconspicuously young, and they nev-er seemed to sleep or rest. Most hadbeen ready to leave India when thisopportunity came along. Now they

threw themselves into India’s futureand worked with an energy that theunderdeveloped world is not com-monly supposed to generate.

From the outset, C-DOT wasmuch more than an engineering

project. It did ofcourse test thetechnical abilityof our young en-gineers to designa whole family ofdigital switchingsystems and as-

sociated software suited to India’speculiar conditions. But it was alsoan exercise in national self-assur-ance. Years earlier, India’s space andnuclear programs had given thecountry pride in its scientific capa-bility. Now C-DOT had the chanceto resurrect that pride.

From the outset, consequently, Iwas interested in process as well asproduct. Technology may be com-plex, but human motivations and in-teractions are even more so. I knewIndia had great young engineers, andI believed there was nothing theycouldn’t accomplish if we chal-lenged them and gave them a properenvironment to work in. Part of ourmission was to inspire a whole gen-eration of young talent and thumbour noses at the nay-sayers, the po-litical reactionaries, and the vestedinterests whose prosperity rested en-tirely on imports. I set impossible

targets. I cheered people on. Know-ing as I did that young Indians didwell in the United States, I tried tocreate an American work environ-ment. I set about instilling a bias to-ward action, teamwork, risk, flexi-bility, simplicity, and openness. Iwas almost brutal in my determina-tion to root out hierarchy and bu-reaucracy: I once shouted and madea thoroughly mortifying scene in or-der to get typists to stop leaping totheir feet every time a manager en-tered their work space to use one ofthe two telephones we started outwith. I did my best to shield ouryoung engineers from bureaucrats,politicians, and business interests.At the same time, I opened our doors to the media, which respondedwith excitement, optimism, and thekind of hero worship that we hopedwould attract more young people totechnology careers.

By 1986, C-DOT had sprawling,chaotic offices, 425 employees (aver-age age 25), and the drive, activity,and optimism of a U.S. presidentialcampaign. My methods had beenhighly unconventional for India andhighly unpopular with a lot of theold guard, but within C-DOT we hadaccomplished wonders.

By 1987, within our three-yearlimit, we had delivered a 128-linerural exchange, a 128-line privateautomatic branch exchange for busi-nesses, a small central exchange

W O R L D V I E W

Activity was bliss. Ourengineers were very young and

never seemed to rest.

8 HARVARD BUSINESS REVIEW November-December 1993

with a capacity of 512 lines, and we were ready with field trials of a10,000-line exchange. Better yet, thecomponents for all these exchangeswere interchangeable for maximumflexibility in design, installation, andrepairs, and all of it was being manu-factured in India to the internation-al standard: a guaranteed maximumof one hour’s downtime in 20 yearsof service. We had fallen short onone goal – our large urban exchangewas well behind schedule – but,overall, C-DOT had proved itself acolossal, resounding success. In ad-dition to the four exchanges, we hadlicensed some 40 public and privatecompanies to manufacture and mar-ket C-DOT products, and more than100 businesses had sprung up tomanufacture ancillary parts andcomponents.

Moreover, these rural exchangeswere small masterpieces of “appro-priate” design.

As I mentioned earlier, even digi-tal switching produces heat, soswitching equipment has to be air-conditioned in order to function de-pendably. But in the countryside, theIndian electrical grid is notoriouslyundependable, and we couldn’t givevillages exchanges that were certainto overheat the first time the electri-cal system went down. The solution

was simple but ingenious. First, toproduce less heat, we used low-pow-er microprocessors and other devicesthat made the exchanges work justslightly slower. Second, we spreadout the circuitry to give it a littlemore opportunity to “breathe.” Thecabinet had to be sealed against dust,of course, but by making the wholeassembly a little larger than neces-

sary, we created an opportunity forheat to rise internally to the cabinetcover and dissipate. The final prod-uct was a metal container aboutthree feet by two feet by three feet,costing about $8,000, that requiredno air-conditioning and could be in-stalled in a protected space some-where in the village and switchphone calls more or less indefinitelyin the heat and dust of an Indiansummer as well as through the tor-rential Indian monsoon.

Our 512-line exchange was de-signed for the somewhat larger mar-ket town nearby, where it couldhandle intervillage and long-distancecalls for a dozen villages or more.What now remained was to dissemi-nate this new technology throughthe Indian telecommunications sys-tem and actually reach out to thetowns and villages that needed it.

In 1987, I chaired a national con-ference that proposed the establish-ment of a new, streamlined, semi-autonomous Telecom Commissionto replace the old, heavily bureau-cratic Department of Telecommu-nications. Before the governmentcould act on that proposal, how-ever, Rajiv Gandhi appointed me ad-viser to the prime minister on Na-tional Technology Missions, with

the rank of min-ister of state. I had to give up myU.S. passport totake the job, but I couldn’t turndown such a mar-velous opportu-nity. The Tech-

nology Missions existed to marshal,motivate, and manage the efforts ofmore than ten-million people andlots of technology involved in meet-ing six basic human needs: drinkingwater, immunization, literacy,oilseeds, dairy production, andtelecommunications.

Our specific goals were straight-forward. Make clean, potable water

available to about 100,000 problemvillages in the amount of 40 liters a day per person and 30 liters a dayper head of livestock. Immunize 20-million pregnant women and 20-million children every year. Teach80-million people in the 15 to 35 agegroup – about 75% of adult illit-erates – to read and write at a rate of10 million each year. Increaseoilseed production by as much as 18-million tons and reduce, eliminate,or reverse India’s annual 10-billion-rupee import bill for edible oils. In-crease dairy production from 44- to61-million metric tons per year overeight years, raise dairy employmentand incomes, and expand the num-ber of dairy cooperatives by 42%.Last but hardly least, improve ser-vice, dependability, and accessibilityof telecommunications all acrossthe country, including rural areas.

The six mission directors workedfor different ministries, so my jobwas to cheerlead, set agendas, andintegrate the activities of ministries,state governments, national labora-tories, and voluntary agencies. Fortwo years, I traveled the country vis-iting tribal areas, villages, towns,cities, and state capitals. Every day Imade two or three speeches, tookpart in half a dozen meetings, talkedto scores of people, made dozens ofphone calls (if a telephone could befound). I was doing my best to gener-ate ideas, communicate goals andenthusiasm, fight red tape, clear ob-stacles, tie up loose ends, assessprogress, mend bureaucratic fences,and bridge bureaucratic ravines. Itbecame by far the most hectic periodof my life, but I got swept up in theromance of making a difference andbegan working and traveling nearlyaround the clock. I saw enormouscommitment from tens of thousandsof people and solid resistance tochange from entrenched interests. Ibegan to sense an unholy allianceamong many politicians, bureau-crats, and businessmen to stop peo-ple from taking power into their own

W O R L D V I E W

Swept up in the romance ofmaking a difference, I was

working and traveling nearlyaround the clock.

HARVARD BUSINESS REVIEW November-December 1993 9

hands through literacy and commu-nity-based programs – and throughcommunication.

I was learning the ropes of devel-opment in action, and everything Isaw strengthened my convictionthat telecommunications lies at thevery heart of progress. This is true inthe political and social sense – peo-ple must be able to reach out to gov-ernment, media, institutions, andallies if they’re to make their voicesheard – and it is true in the morepractical sense that development de-

pends on communication for logisti-cal efficiency. Let me give two exam-ples of what I mean.

One of our greatest assets in theoilseed and dairy missions was Dr.Verghese Kurien, chairman of theNational Dairy Development Boardand winner of the World Food Prizein 1989. In the 1950s, Dr. Kurienstarted the farm cooperative move-ment in India and in 30 years built itinto a multimillion-dollar enterprisewith a membership of one-millionfarmers in 50,000 villages. Forget-ting for the moment the added yearsand extra toil it took to build such anorganization by word of mouth andpersonal recruitment, aided only bya postal system famous for incompe-tence, just imagine the task of galva-nizing this organization into con-certed action without the ability tocomputerize membership roles or tocontact members by phone or tele-graph. In spite of that limitation, Dr.Kurien has succeeded in stabilizingoilseed prices by buffer-stockinglarge quantities of oil and in buildinga cooperative milk-distribution sys-tem that reaches 170-million people.Telecommunications makes the ef-forts of men and women like Dr.Kurien incalculably less onerous andmore effective, which is one of thereasons a dozen agribusiness lobbiesin New Delhi oppose the spread ofrural telephones.

Another example comes from thedrinking-water mission. One groupin the Rural Development Ministrywas pushing for the purchase of 40imported drilling rigs at a cost of sev-eral million dollars. Unfortunately,there were two vital pieces of infor-mation that no one seemed to pos-sess: first, the number of drilling rigsalready in the country, and second,the length of time it took to drill awell and how long it took to move a drill from one village to another.

We found a UNICEF official whowas able to tell us that India al-ready owned 1,200drilling rigs, andseveral weeks ofresearch revealedthat, on average,it took about tenhours to drill a

well and roughly ten days to move arig. These were not ten days of traveltime but ten days of bureaucraticwrangling and communication dis-array in picking a site, negotiatingpolitical priorities, and getting theequipment on the road for a trip of a day or two. If a proper telecom-munications network allowed theministry to improve its planning andcoordination even enough to cutthat time to five days, India wouldgain the equivalent of 1,200 newwater-drilling rigs without importinga single one.

Yet many of those who asked suchquestions and argued in favor of suchsolutions were accused of promotingtechnology at the expense of devel-opment and, to add insult to injury,of not understanding the plight ofthe drought-affected poor.

The fact was that no one in Indiahad previously investigated and ar-ticulated the role that informationsystems play in development. Oncewe started, the practice and the in-sight grew and grew. After two yearsat the Technology Missions, I wasgiven a chance to shape that practiceeven more directly.

In 1989, after two years of debateand study, the government decidedto reorganize Indian telecommuni-cations and create the TelecomCommission recommended in our

1987 report. Rajiv Gandhi appointedme the commission’s chairman.

I met for three days with the headsof all telecom companies in thecountry: service providers, manufac-turers, laboratories, C-DOT, andothers. Then I met with the leadersof 37 telecom unions and the tele-phone white-collar bureaucracy. Atthe moment I took over, Telecomhad 500,000 employees managingfive-million lines, and it took menine months to get their leaders tobuy into my plan to quadruple thelines by the year 2000 withoutadding to the work force.

Once the unions were on board,we faced three fundamental chal-lenges: connectivity, accessibility,and rural expansion.

First, we replaced all our existingelectromechanical long-distance ex-changes with digital equipmentmanufactured in India on licensefrom a French company. We set uptwo factories to manufacture fiberoptics and built high-speed fiber-op-tic highways to connect the fourlargest metropolitan areas: Bombay,Delhi, Calcutta, and Madras. Weconnected 400 district headquartersto automatic dialing, increased ourpopulation of digital switching ex-changes by 50%, expanded the ca-pacity of switching-system manu-facturers, and increased automationat the operator level. We launched a multimillion-dollar program tocomputerize telecommunicationsoperations nationwide. We intro-duced international direct dialing tomore than 120 countries.

In a country the size of India withonly five-million phones, it is diffi-cult to have a significant impact ontelephone density. Quadrupling thenumber of lines still means only onetelephone for every 50 people, com-pared with more than one phone forevery two people in the UnitedStates. Accessibility is another mat-ter. By providing more phones inpublic places, we could put millionsof people within reach of telecom-munications.

In most areas, coin-operatedphones seemed a poor idea for anynumber of reasons, including thefact that they cost a great deal tomanufacture. Instead, we equip ordi-

W O R L D V I E W

Politically, economically,socially, and logistically,

telecommunications lies at thevery heart of progress.

10 HARVARD BUSINESS REVIEW November-December 1993

nary instruments with small me-ters, then put these phones into thehands of entrepreneurs who setthem up on tables in bazaars, onstreet corners, or in cafes or shopswhose owners feel they attract cus-tomers. These telephone “owners,”frequently the handicapped, take incash from their customers but arebilled only six times a year, with20% to 25% discounted as theircommission. The phones are in suchconstant use that, in most cases, therevenue is enough to support a fami-ly. We launched a drive to install200,000 such phones in publicplaces nationwide, creating morethan 100,000 jobs along the way. To-day, the small yellow signs indicat-ing a public telephone can be seen allacross India.

The third piece of the program was rural communication, close tomy heart because of my own back-ground, and I now set in motion anambitious program that envisionednothing less than universal telecom-munications accessibility by theyear 2000. For us, accessibility wasto mean that every Indian citizenshould live within three or four kilo-meters of a dependable instrument,a goal that may strike Westerners astrivial, though I believe it will alterthe face of India.

Several years earlier, C-DOT hadrun a test in Karnataka state withhugely encouraging results. In onetown of 5,000 people with almost noprevious telephone service, businessactivity rose many times followinginstallation of an automatic digitalexchange for 100 lines. Suddenly, itwas possible for a truck owner tochase his drivers, line up goods andlabor by telephone, and monitor themovement of his vehicles. Localfarmers could call nearby cities andget real prices for their produce. Ar-tisans could speak to customers, ma-chine operators could arrange forservice and repairs, shopkeeperscould order goods – all by phone andin real time. In the six months afterthe introduction of service, totalbank deposits in the town rose by animpressive 80%.

There were also social benefits.The townspeople could call doctorsand ambulances, order pumps and

textbooks, call newspapers, speak topoliticians, share experiences withcolleagues, and organize communityceremonies and functions. One vil-lager told me that when his fatherdied seven years earlier, he’d had tosend 20 messengers on trains andbuses to inform relatives in nearbyvillages. More recently when hismother followed, the villager wentto the local tea shop and phoned all20 villages – instant, certain, and farless expensive.

One-hundred phones in a town of5,000 is a laughable density to anAmerican and a miracle by Indianstandards. Among other surprises,we found considerable long-distancetraffic not just to Delhi and Bombaybut also to London and New York.The villagers, it seems, have rela-tives and friends in all four cities.

In 1989, we set a goal of installingone rural exchange a day. By 1993,Telecom was installing 25 rural ex-changes every day, and the rate continues to accelerate. By 1995,100,000 villages will have telephoneservice. By the turn of the century or very shortly after, almost all of India’s 600,000 villages will be cov-ered. Once in place, the village tele-phone becomes as critical as water,food, shelter, and health services.Once exposed, people in rural areaswant a village telephone more thanthey want anyother communi-ty service.

Of nearly equalimportance forme, the commu-nity phone be-comes an instru-ment of socialchange, funda-mental to theprocess of democratization. Withtelecommunications networks nowspreading across the Second andThird Worlds, I believe that noamount of effort can put informa-tion back in the hands of the few, to be isolated, concentrated, andcontrolled.

My own effectiveness with the In-dian Telecom Commission ended in1990. Rajiv Gandhi was defeated inparliamentary elections in Novem-

ber, 1989, and I came under politicalattack a short time later. EventuallyI was accused of corruption. Busi-nesses owned by my family in theUnited States were said to have prof-ited by contracts I awarded while atC-DOT. A thorough investigation bythe Comptroller and Auditor Gener-al of India turned up no evidence tosupport this allegation. Moreover, to my gratification, hundreds of sci-entists, colleagues, academics, andthousands of citizens came to my de-fense. But the strain was very great.My family moved back to the UnitedStates, and in October, 1990, I had a heart attack. A few months afterquadruple bypass surgery in Delhi, I went back to work as chairman of the Telecom Commission, withhigh hopes that Rajiv Gandhi wouldbe returned to office in the 1991elections. When Rajiv was assas-sinated in May of 1991, I resignedfrom my job as chairman and re-joined my wife and children in Illi-nois. The only post I now held wasadviser to the new prime minister onTechnology Missions, the same po-sition I had held under Rajiv Gandhibut resigned when he left office.

Though I don’t think of my tele-com work in India as finished, I havebegun to alter my focus somewhatover the last two years. Specifically,I’ve been struck by the precondi-

tions that the First World has set forThird-World development. Europeand North America built theireconomies with the help of coer-cion, work-force exploitation, childlabor, and environmental plunder,but the First World has announcedto the Third that these and other vio-lations of human and ecologicalrights are quite unacceptable.

The developed countries are forc-ing human rights and environmentalsensitivity on the world’s poor, set-

W O R L D V I E W

Countless Indian towns canbear witness to telecom’s dramatic effect on business, em-ployment, and the overall stan-dard of living.

HARVARD BUSINESS REVIEW November-December 1993 11

ting all kinds of new conditions andrestrictions on economic growth.This is not fair, of course, but it is an excellent policy.

Still, the First World must under-stand that it is not likely to achievethis policy goal except with the helpof telecommunications and other in-formation technologies, for two sim-ple reasons.

First, telecom makes abuses in-finitely easier to monitor. It giveswatchdog groups as well as the vic-tims and witnesses of human andenvironmental outrage access to oneanother. Local stories become in-ternational news, and local eventsbecome global events. Just as infor-mation technologies helped maketotalitarianism impossible in East-ern Europe, they can help destroy ex-ploitation in the developing world.

Second, telecom helps to createwealth, and prosperity is every-where a force for civilized behavior.Take child labor. It is poverty thatputs children to work, and it is un-skilled labor that children are able to perform. When telecommunica-tions comes to the Third World, it

brings with it new economic activity,new higher-paying jobs for parents,and new technologies that reducethe utility of unskilled child labor.Countless towns and villages in In-dia can bear witness to telecommu-nications’ electrifying effect on en-trepreneurialism, employment, andthe overall standard of living. On top of all that, of course, informa-tion technologies create their ownskilled jobs.

The dreadful human and physicalconditions that the industrial revo-lution created in the West are nowavoidable. But it is not some funda-mental improvement in human na-ture that makes such progress possi-ble. Growth without freedom andresponsibility can still take place. Itis technology, and information tech-nology in particular, that makes hu-mane development feasible.

The fact is, the telecom revolutionhas hardly begun. In addition to newproducts, systems, and integratedservices, we will soon have new in-formation-based relationships withour society and environment. But ifsustainable progress of this kind is

not to be limited to the developedworld, then there is one initial hur-dle still to clear.

The Third World still lacks ade-quate investment in telecommuni-cations. Telecom in the developingworld needs about $30 billion a year,of which only $3 billion is pres-ently available. The World Bank de-votes only 2% of all its funding totelecommunications. Corporationsare attracted by the prospect of im-mense long-term profit but fright-ened by political risk and the cer-tainty of social and economicexperimentation.

Along with a number of fellowtelecom engineers and executives, Iam now working to organize a spe-cial funding agency, similar to theWorld Bank, to support Third-Worldtelecommunications. Without prop-er telecom institutions and infra-structure, sustainable developmentwith freedom will be difficult toachieve. Without telecom develop-ment, we will never deliver 75% ofthe world’s people to the civiliza-tion of the information age. Reprint 93611

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