Sunday, March 15, 2009

Day 1 in India: Village Business School Information Gathering in Uttar Pradesh

Day 1 was a community organizing effort to gather information in the state of Uttar Pradesh, two hours from our home base in New Delhi. Our teammates from thee Rai Business School went door-to-door with loudspeakers to recruit people for the focus group. 

We are here in Delhi advising the Rai Foundation on how to set up MBA programs based in rural villages.

I had an interesting conversation with my colleague Aftab beforehand about the agriculture out here. It is almost all small-scale agriculture (12 acre or so plots). At this meeting, there were many young men who were college graduates, but tied up working on farms. One key for countries to move from a developing economy into a middle-income nation is to move from small-scale agriculture to mass production in larger lots. Not only does this increase GDP and food security, it also frees up intelligent people like this stuck tending irrigation ditches to become industrial managers and entrepreneurs. The village business school idea can be a way to drive that.

We had a very good turnout, approximately 20 students, at least 8 or 10 other onlookers. All male. Literally not one female. Some locals came and advised us there are not more than 20 to 25 of the right students in this village, students with undergraduate degrees who are underemployed. This village may not be the right target at this size. They are targeting to have 15 or so people in the program in each village initially, and grow the number. This village would have to be included in a pool strategy with several other villages nearby to work. Additionally, Rai will have to work hard to develop awareness and demand.

A social worker here said that he believed that the motivation was very low in this village as well, and people would have very little money to pay. Skilled worker, engineers, doctors, lawyers and others have already departed for more urban areas where they can make more. There is a need to somehow develop the initial motivation here by providing a seed.
Financing will be another issue. When Indians deploy their capital, they want big upside. But they want you to guarantee them on any risk! This may be necessary early on in the life of this project – handing out lots of scholarships and “money back guarantees” for those who the Rai Foundation can’t get better jobs.

Since I was sitting there on my laptop in a chair, apparently one of the villagers with a microphone thought I was important enough to ask a direct question to. The question was questioning the role and fit of MIT curriculum in the village. He was saying that MIT as a research school didn’t fit with the agricultural learning needs of the locals. It was actually a good question, although they guy who was asking it seemed upset at us for some reason. Maybe he was just trying to show he wasn’t terribly impressed by the MIT brand.

I almost said, “Hey man, I just got here!” I really had JUST gotten there, about 10 hours earlier, with less than 2 hours of sleep.

But in the spirit of openness, I said that this initiative is about building something that fits the needs of the people in the villages, not about pushing a MIT MBA curriculum that would be full of information that might be useless in village India. I said that we wanted to hear what they were interested. That seemed to change the tone of the talk towards being more open. I think that they didn’t want people looking at them and seeing them as backwards and proselytizing this new program to them. That's a line we'll have to tread carefully.

Many in the villages seem to be more interested in public sector jobs. These jobs are substantially easier than working on the farm and it is almost impossible to lose the jobs. Those who are interested in these types of jobs don’t seem to think a MBA will help them.

Loan rates are very high. 9 to 12% is typically on collateralized loans. What collateral would be offered for the village schools program? Those are details that need to be worked out.

One last thing is that a key part of the MBA experience is networking and the shared culture. How will we build that here? Perhaps if it is people coming together from the local villages, this will unite communities.

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