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close this bookGATE - 4/92 - Networking: Lessons and Hopes (GTZ GATE, 1992, 56 p.)
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View the documentAppropriate technology in post-modern times
View the documentWhy ''Post-Modern Times''?
View the documentConcept for pre-better times
View the documentWalking on a cultural and a technological leg
View the documentCommercially viable mechanisms for the rural poor
View the documentAppropriate institutions
View the documentStrengthening of local advice capacity

Commercially viable mechanisms for the rural poor

For science and technology to be translated into useful products needed at the village level, the process of innovation and particularly R & D, must be closely tied to the processes of production and marketing. Few public programmes or institutions of the conventional type are generally willing to support or permit this.

At the same time, in a developing country like India, social, resource, environmental and other factors make it impossible for purely private sector approaches to satisfy the national objectives of equity, environmental harmony or self-reliance.

In view of this, if R & D funds intended to attack basic societal problems and human needs are not to be largely wasted, a whole new approach to the support systems for innovation is imperative.

If national development is to be sustainable, then the consumption patterns of both the rich and the poor must change rapidly. The pressure on resources which will be needed in the future is aggravated by disparity - through the wasteful and excessive depletion of the "non-renewable" ones by the affluent and through the excessive utilisation and destruction of the so called "renewable ones" by the poor. It is only through a development that is more equitable that we can hope quickly to make the demographic transition, without which there can be no possibility of achieving our aspirations of a better world for all to live in.

Market Failure

Given the size of the rural market, it is surprising that a larger number of technology-based products has not been available to it. Traditional analyses usually fall back on simplistic explanations such as the limited purchasing power of the villager or the "resistance to change" of village societies. Given the rising incomes from modern agriculture in many parts of the country, and the immediate acceptance of certain technologies and products such as transistor radios, battery torches, televisions and videos even in the remotest areas, such explanations are clearly inadequate.

That there has been a catastrophic failure of the market in rural India is unquestionable. It is self-evident that there exists a great range of unfulfilled needs, yet there appears to be no demand. On the other hand, there exists a vast number of technologies and products which can meet these needs, and yet there is no supply.

There can be little question that the villager could use, and the business community could produce, a full spectrum of products, such as improved chulhas, biogas plants, windmills, solar devices, proylysis units, and briquetting machines. Many other technologies, such as water pumps, compressed (unfired) mud blocks, bicycle trailers, efficient weaving technologies, etc. not only contribute to better health and raising income levels, but can also be considered to be energy technologies in the sense that they save or substitute for a scarce energy resource. While such products may appear to be simple in comparison to those available in the urban market, they can make a dramatic difference in the lives of the poor.

Programmes based purely on government initiative for developing the rural economy are limited not only in the actual resources ever likely to be available to them but, more important, in their ability in principle to reach the large numbers involved. Neither the basic budget nor charity can provide large enough resources to scratch more than the surface of rural poverty. Any solution to the problems of the rural poor must lie in the establishment of commercially viable mechanisms which enable the demand and supply of rural products to jump to much higher levels than exist today.

"Clusters" and "sets"

The appropriate product range has to be identified in terms of two separate and more or less independent sets of scale-related criteria: the first to achieve economies of scale in the production process, and the second to achieve economies in the marketing process.

The group of technologies which can be produced economically in a small production unit, we call the "Cluster" Such a cluster comprises technologies and products which have substitutable, complementary, and/or shareable methods of production. In more concrete terms, the skills, tooling, raw materials, components and parts are to a considerable extent the same or interchangeable for each product in the range. A small factory is able to maintain continuity of production and achieve overall economies by being able to switch efficiently and quickly from one product to another.

To achieve analogous economies at the marketing end, the small rural entrepreneur has to be able to offer what we term "Sets" of technologies. This concept relates technologies which are substitutable, complementary or in some other way related to each other from the point of view of sales, use or maintenance. For instance, the soil block making process can be made considerably more efficient by adding to the soil block press a number of simple ancillary devices such as sieving and mixing equipment, a hopper and material handling equipment.

These twin concepts of "Clusters" and "Sets" are an essential part of the technology design process aimed at making rural products economically viable. It should be recognised that at the clustering end and (though perhaps to a lesser extent) at the packaging end, the technologies do not necessarily have to be restricted to a single end-use combination. For example, a small scale factory which is able to interchange production between woodstoves, lamps, and agricultural implements will benefit from a more evenly balanced use of its sheet metal working facilities in production and of its sale channels in marketing. In the area of income generating technologies, particularly those requiring training, design input, buyback and urban marketing of products, the "Clusters" and "Sets" will necessarily bring together widely different component technologies into a viable and coherent product range.
Ashok Khosla