Paul Basil identifies promising rural innovations, develops them into enterprises, and enables their diffusion through commercial and noncommercial ventures. Through his work, Paul is extending social investment to rural areas and ensuring that the best solutions reach as many thousands of people as possible.
The New Idea
Paul sees that people living in rural areas must confront problems of every sort with few resources or ready-made solutions. Some brilliant and widely applicable practical solutions surface in this environment, yet more often than not, the solutions designed by rural people are seen merely as local innovations, with limited application beyond a small cluster of communities. Using a venture capital investment model, Paul is reaching these rural innovators who have little visibility or access to support. He and his staff identify promising ideas, such as rain guns, automatic seed-drills, bio-insecticides, and solar water purifiers. By mentoring the men and women behind the ideas, Paul and his team help refine, promote, and market the ideas or products.
Paul expects his work to catalyze a new wave of venture capital, promoting innovative alternatives that are the products of enterprising rural people. He has demonstrated that with suitable exposure, modifications, technical assistance, and incentives, these homegrown innovations can replace expensive, ineffective tools and can solve some of the region's most pressing social and agricultural problems. Paul's work shows that it is possible to attract venture capital when both utility and market value are added to rural innovations.
Rural India is predominantly based on agriculture, and in all of India sound development is not possible without developing agriculture. Today, there are several modern implements in the market for tilling, sowing, watering, harvesting, de-husking, packing, and transporting, along with traditional tools and methods. Most are either marketed by branded companies or by local producers. What the tools do not feature is adaptability to local needs and affordability to poor farmers.
With in-house research and development, voluntary organizations, governments, and a few corporations sporadically attempt to take technologies and products to the villages. But in most cases, the research innovators are not the knowledgeable farmers and artisans from the rural areas; they are scientists, technicians, and specialists from outside. Although they mean well and some are skilled in controlled situations, they fail to meet the dynamic needs of rural areas. They too infrequently provide the continuity of support and training required to introduce effective, long-term solutions.
Most locally inspired innovations do get catalogued. However, they rarely attract the capital required to grow into larger businesses. Efforts to obtain government support–even to back those prototypes that suit different geographical needs–have proved unsuccessful. Therefore, rural people lose opportunities to develop viable businesses and improve the local economy.
Rural innovators are extremely good at solving local problems in ways appropriate to the conditions. However, they often lack business and entrepreneurial skills. Lack of skills and resources in terms of field testing in different zones, scaling up production, and marketing often keeps innovations from spreading beyond a limited region. The result is that good ideas and products lack the refinement, capital infusion, and marketing to roll out into new markets. Rural innovators see that the largely symbolic returns for their efforts prevent them from surging ahead.
Venture capital is relatively new in India. Social venture capital is newer still. Paul notes that there are hardly any venture capital funding organizations for rural sector development. As a result, he thinks that many innovative products and ideas fail even when they are ready for widespread application and the market is ready. In addition, convincing a venture capitalist to invest in any enterprise requires a great amount of preparation. For many people living in rural areas, this is an especially high hurdle.
Paul believes that rural artisans, farmers, and those who are involved in daily affairs of the rural life are more effective in finding solutions to rural agricultural needs and problems than outside technicians and researchers. Guided by this observation, Paul scouts for successful rural innovators, develops and adapts their local innovations to meet needs from other areas, packages the innovation into a viable product, and helps the innovator attract capital for production and marketing.
Rural areas face myriad needs and challenges, and in most cases leaders innovate to meet a specific need that is highly location-specific. But, Paul's organization–Rural Innovations Network (RIN)–helps innovators improve upon innovations with a larger rural market in mind. Qualitative market research is done intensely before initiating work on any innovation and also during the pre- and post-innovation, market-launch period.
Paul says his organization is unique in that it takes technologies from one village and distributes them to thousands of others. Most of the time, a need in one village is similar to a need in another. "The problem is that the rural needs are many, while innovative solutions are limited," Paul says. "By introducing effective, proven technologies across rural India, RIN is contributing in a significant manner to rural development." To address the issues of developing access to resources and markets, the organization invests its human capital to establish links and empower innovators in the process. By offering a continuum of training and support, RIN distinguishes itself from other well-meaning but ineffective efforts.
One of the major initiatives RIN plans to adopt is an annual competition for innovations. The campaign is planned to reach out to rural farmers, artisans, and others through established media and outreach channels. Paul is also exploring the possibilities of harnessing the help of agricultural students from various universities to take on the task of scouting for rural innovators as part of their field studies. An expert panel would judge the identified innovations for awards. "These awards will motivate the rural innovators to continue innovating and will recognize innovation publicly," Paul explains. "We believe that many more will start innovating and exploiting their creative spirits as a result of these awards." From the innovations documented, RIN will carry out detailed feasibility studies for 10 to 15 innovations every year as a first step to building rural enterprises.
When Paul started the work, he assumed that many inventions would come in a rudimentary prototype form. Some, like the solar water purifier they are handling now, were presented as concepts. RIN took up the task of getting technical refinement, market research, and product designers. A business plan is also developed for the enterprise with the help of the innovator. With innovations for which technology is perfected and standardized, ideas and products are manufactured and marketed in many ways. In certain cases, innovators are developed as entrepreneurs (Innovator Promoted Rural Enterprises), while in others, technology is transferred to private entrepreneurs (RIN-supported manufacturing). The intellectual property rights of the innovators are protected by filing for patents and trademarks. RIN is also sourcing commercial investments so that these will continue as self-sustaining rural enterprises.
"In all these operations there is tremendous risk," Paul says. "But we are looking at possibilities of changing the mindset of the investors. We are calculating the possibilities of giving a 7.5 percent return to individual investors. At the same time, a venture capitalist has the potential of getting good returns while serving the society." By 2007, Paul expects both to have commercialized or disseminated over 40 innovations and to have developed a franchising methodology to replicate the organization throughout India with a viable social investment bank.
Paul spent most of his student years living in hostels, finding that hostel life gave him opportunities to interact with and understand people from different places and backgrounds. He completed his mechanical engineering degree reluctantly, as he thought the course was not especially useful to his real interest–community development. After much thought about rural development and management of rural resources, he joined the Indian Institute of Forest Management. It gave him an opportunity not only to learn development techniques, and management principles, but also to share experiential learning.
He started his career with a group that promoted tree-growing in rural India, working along the borders of Karnataka and Andhra Pradesh. He soon realized that the project was not reaching the expected result so he shifted his base to Kerala. He also realized that few organizations in the social sector were thinking about bringing in quality management and establishing output measures.
In 1994 Paul joined the Kerala Horticulture Development Program, a joint program of the European Union and the Government of Kerala. As part of the marketing team, he introduced the "farmers' market" concept to fruit and vegetable farmers as a marketing venture of a collection of Farmers' Self-Help Groups. He was also responsible for developing a franchising system and opening outlets for fruits and vegetables in supermarkets. While working on this project, Paul handled credit through local banks, crop insurance, training on management skills, and participatory research. The Kerala model has been adopted by the Central Government and is a part of the 10th five-year plan.
Paul was also inspired by the Gujarat Grassroots Innovation Augmentation Network, which was initiated by the Government of Gujarat and the Indian Institute of Management, Ahmedabad. He also observed the HoneyBee Network, which is involved in documenting rural innovations. Out of interest, Paul followed several rural innovations and realized that most of the ideas were stagnating either because of the innovator's inability to follow through or because of poor documentation. He illustrates his point: "Manoharan of Tamil Nadu developed a banana stem injector in the mid-90s and it was with him without seeing the light of the day. Anna Saheb, a 70-year-old farmer from Karnataka designed a remarkable rain gun. But he had no means to reach the target market. Somasundaram and Gnanamani patented a seed drill in the late-80s, but they never saw commercial returns." Paul formed RIN in 2001 as a nonprofit venture to incubate enterprises based on successful rural innovations.