Dr A.P.J.Abdul Kalm
Address during the National MSME Convention organised by Indian Industries Association Lucknow 7 October 2010

MSME leads to Economic Empowerment
of the Nation Prosperity

"PURA is a sustainable development system"

I am indeed delighted to participate in the National MSME Convention organized by the Indian Industries Association here in the historic and multi-dimensional city of Lucknow. My greetings to all the participants of this convention which will provide a platform for understanding and exploring the wide range of industrial opportunities available in MSME sector.

I was thinking that what shall I discuss with you today at this important event and I have selected the topic for discussion: "MSME leads to Economic Empowerment of the Nation Prosperity".

Law of Development

I was studying the development patterns and the dynamics of connectivity between nations, especially in trade and business. As you all know the world has a few developed countries and many developing countries. What is the dynamics between them and what connects them? Developed country has to market their products in a competitive way to different countries to remain as developed country. The developing country to get transformed into developed country; they too have to market their products to other countries in a competitive way. Competitiveness is the common factor between the two types of countries, both developing and developed. It has three dimensions: quality of the product, cost effectiveness and supply in time. Indeed this dynamics of competitiveness in marketing of products by developing and developed countries is called the law of development.

Innovation

I was studying the Global Competitiveness Report for the year 2008-2009. There I find in terms of Growth Competitive Index ranking US is ranked 1, Switzerland is ranked 2, Singapore is 5, Korea is 13, China is 30, UAE is 31 and India is 50. We are performing in a range of competitiveness index which needs to be improved. Growth competitiveness is determined by the innovative ability of an organization. This innovation arises from institutional initiative and the R & D productivity of the firm, shaped by policies and nature of local institutions. We need to work for improving their competitiveness index and aimed to reach top 10 during the next five years. This requires the combined efforts of researchers, technologists, production engineers, business leaders and above all political systems. I would suggest this programme may developed the strategies for promoting competitiveness particularly in the MSME area.

Missions for Small Scale Enterprises:

While addressing the Small Scale Enterprise Association, I had made certain recommendations to the industries and the entrepreneurs which I would like to share with you, since each one of them has the potential to improve the competitiveness of the enterprise.

1. There is an urgent need for the revival of about 85000 sick MSME units by injection of the technology in right time supported with capital infusion and provision of continuous training programme. This will enable higher level of productivity from this sector.
2. The small scale industries contribution to the export from India has to be doubled within the next five years.
3. Banks have to become partners of the small and medium scale industry and provide adequate working capital without delay, so that the unit is always life and bubbling.
4. Cost and quality of the product must necessarily be inbuilt right at the design stage with value engineering criteria. In the value chain of the product life cycle, the design effort contributes fifty percent of the total value and quality. Thus the design knowledge gives a larger leverage to the small scale industry for realization of competitive products. There should be design centre in each region providing design support for number of small scale industries.
5. Competitiveness comes out of large quantity needs, cost effectiveness, quality, and marketing capability. Today a new situation has come, where MNCs are coming to our country for the availability of high technical man power and lower cost of production in software or hardware or combination of both. Hence, Small Scale Industries have to take this potential as an advantage. Also I would like to suggest a thought in out-sourcing and sub-contracting methods. Here particularly you may aim at realizing component level outsourcing to cottage industries and also to homes wherever applicable which will reduce the product cost substantially and make your products competitive.
6. Uttar Pradesh has got about 6.5 lakhs MSME units with the investment of rupees 10,000 crores with the employment generation of 25 lakhs people. The MSME has spread all the regions of UP - western, eastern, central and Bundelkhand. The 6.5 MSME has a unique environment of rupees 200,000 crores invested medium and large industry. The small-scale industry has to become a dynamic partner to the medium and large industry.

I would like to give some success stories from India.

Garment industry supported by rural women

On 15 October 2008, I had visited Iledu Village in Kancheepuram district where National Agro Foundation has been working on improving the agricultural productivity of the village and also simultaneously finding out non-farm avenues of value added work to the rural community. They had created a linkage between the rural women and garment export company operating from Chennai. The design and raw material is provided to the workers at Iledu and finished products are sent to Chennai for export. This brings out the need for export quality packaging for the product. Ideally, it will be useful to execute final packaging at the rural level itself which will enhance the income potential of rural citizens and prevent migration to the cities. I would suggest the organizers of this programme to come up with the proposal for creating competitive packaging system production establishment using local material and skill. This will be an important value addition for the textile industry as a whole.

Grass root innovation

While participating in the Award ceremony for the winners declared by National Innovation Foundation (NIF), I have found that during the last 9 years NIF has identified over 100,000 innovative practices which have lead to 100s of patents including 20 international patents.

Now, we are ripe to see that the benefits of innovation reach the community in large number for which an integrated action is needed. This action will enable creation of number of rural enterprises in nation as a part of PURA clusters (Providing Urban Amenities in Rural Areas). Let me now discuss about this sustainable development system.

Sustainable Development systems

Attainment of prosperity will be effective only if the nation and its corporations are also able to evolve products and systems which are sustainable. Here I would like to discuss about the system for the integrated rural prosperity with sustainable development which is being pursued by government and private institutions in our country. This is called the PURA (Providing Urban Amenities in Rural Areas) Mission that may be applicable globally for sustained development of the nations and societies.

PURA as a Sustainable Development system

Friends, this year India turned 63 years old as the largest democracy in the world and we witness a defining period for the nation and its people. We stand ten years away from the goal of achieving the vision for a developed India by 2020, and there has been significant progress in all directions. Each step we take towards a developed nation also opens a fresh challenge to overcome. The need of the hour is the evolution of sustainable systems which act as "enablers" and bring inclusive growth and integrated development to the nation.

One such sustainable development system is the mission of Provision of Urban Amenities in Rural Areas (PURA). It means that:

1. The villages must be connected with in themselves and with main towns and metros through by good roads and wherever needed by railway lines. They must have other infrastructure like schools, colleges, hospitals and amenities for the local population and the visitors. This is physical connectivity.
   
2. In the emerging knowledge era, the native knowledge has to be preserved and enhanced with latest tools of technology, training and research. The villages have to have access to good education from best teachers wherever they are, must have the benefit of good medical treatment, and must have latest information on their pursuits like agriculture, fishery, horticulture and food processing. That means they have to have electronic connectivity.
   
3. Once the Physical and Electronic connectivity are enabled, the knowledge connectivity is enabled. That can facilitate the ability increase the productivity, the utilization of spare time, awareness of health welfare, ensuring a market for products, increasing quality conscience, interacting with partners, getting the best equipment, increasing transparency and so in general knowledge connectivity.
   
4. Once the three connectivities viz Physical, Electronic and knowledge connectivity are ensured, they facilitate earning capacity leading to economic connectivity. When we Provide Urban Amenities to Rural Areas (PURA), we can lead to upliftment of rural areas, we can attract investors, we can introduce effectively useful systems like Rural BPOs, Micro Finance.

The number of PURA for the whole country is estimated to be 7000 covering 600,000 villages where 700 million people live. There are number operational PURA in our country initiated by many educational, healthcare institutions, industry and other institutions. Government of India is already moving ahead with the implementation of PURA on the national scale across several districts of India.

Let me present one such platform which emanated in 2008-09, during my lectures at Indian Institute of Management, Ahmedabad.

PURA Corporation

One of my student, evolved a unique enterprise driven model of sustainable welfare model through the idea of a PURA Corporation. The essence of PURA Corporation is the belief that PURA enterprises of next generation, need to think of its relationship workforce as beyond being the provider of mere livelihood. The PURA Corporation envisages in the overall, integrated development of the overall rural population in the PURA Complex. Moreover, it has the vision of sustainable socio-business models which are as a vertically integrated network of multiple entrepreneurs, who share synergies and provide for value addition to each other, leading to overall benefit of the complete model and all its stakeholders. The PURA Corporation has two kinds of entrepreneurs -

1. Resource Entrepreneurs: They will focus on the economic realization of the natural, traditional and human resources with the help of customized technology and modern management for enhancing the income level for every household. They would be achieving the critical role of moving resources, up the value chain by application of best practices and matching product to market. This will generate wealth for the community and augment the purchasing power of the people. Their performance will be reflected in the overall growth of the GDP of the rural complex.
   
   
2. Social Entrepreneurs: They would focus on improving the human development index, in terms of education, healthcare and improvement of standards of living by provision of amenities and equity across various diversities. These entrepreneurs will hence promote the realization purchasing power into better life and hence more skilled workforce in the area. Their performance will be objectively reflected in the enhanced literacy levels, reduced IMR/MMR/sickness, enhanced nutrition, access to good habitation, sanitation, clean drinking water and quality energy. It will also lead to environmental consciousness and reduction and in societal conflicts.

The entrepreneurs of PURA Corporation, would work in close synchronization and integration with the help of local PURA champions - who may be institutions or organizations of repute. They will be partners with the government, local administration and Panchayati Raj (village governance institutions). The enterprise network of PURA corporation has to be evolved with the technical collaboration from a multi-dimensional array of technological and managerial institutions. Similarly, enterprises from different parts of the nation and the world can be partners to the PURA corporation by acting as equity investors, exploring and facilitating market linkages and providing a technological platform the best practices and innovative solutions to production challenges can strengthen the socio-economic rural complexes. In this way, enterprises and business units from across the world can share their core-competencies to harness the resources of untapped rural regions and also lead to human development. Such collaborative platforms for 600,000 villages with over 150 billion dollar market, can harness on aggregation an economy of scales leading to mutual benefits. Thus in this model, economic empowerment is channeled into value based social transformation for establishing a culture of excellence with cooperative-competition based on mutual trust and harmony spread across the PURA region.

I have met many young aspiring entrepreneurs in many states of India and abroad who are showing keen interest to be a part of the mission and take it forward as a viable instrument for societal change. The professionals, entrepreneurs and experts assembled here may like to see, how they can be a part of the socio-economic network towards the realization of development customized to a wide spectrum of population across the nation which focuses on skill development and job creation leading to empowerment.

Conclusion

Since I am in the midst of this audience participating in the competitiveness development programme, I would like to discuss the relationship between the economic development and creative leadership.

• Nations Economic development is powered by competitiveness.
• The competitiveness is powered by knowledge power.
  
• The knowledge power is powered by Technology and innovation.
• The Technology and innovation is powered by resource investment.
• The Resource investment is powered by revenue and return on Investment.
• The Revenue is powered by volume and repeat sales through customer loyalty.
• The customer loyalty is powered by Quality and value of products.
• Quality and value of products is powered by Employee Productivity and innovation.
• The Employee Productivity is powered by Employee Loyalty, employee satisfaction and working environment.
• The Working Environment is powered by management stewardship and sound project management.
• Management stewardship is powered by creative leadership.

Who is that creative leader? What are the qualities of a creative leader? The creative leadership is exercising the task to change the traditional role from commander to coach, manager to mentor, from director to delegator and from one who demands respect to one who facilitates self respect. The higher the proportion of creative leaders in a nation, the higher the potential of success of visions like "developed India." I am sure, the competitiveness development programme will focus on developing such leaders in every professional cadre.

My best wishes to all the participants success in their mission of nurturing competitive medium and small scale industries for inclusive economic growth in the country.

May God bless you.