Don't forget rural society

The McKinsey Quarterly just came out with a great article about entrepreneurship - in rural India and China - and how important rural society is to overall economic growth. A sharp contrast is drawn between China's approach in developing investing in its agrarian villages and India's still poverty-stricken outlands.

Excerpts from Tarun Khanna’s article:

“In China, for instance, the government actively spurred the village economy, largely through agricultural-reform measures implemented during the 1980s.”

“India, however, has not. The nation’s government has failed to invest in its villages. The farmers who sold their produce in a mandi in Bangalore live a daily struggle for existence in their home villages. Today, 89 percent of all rural households do not own a telephone, and 52 percent have no domestic power connection. The average village is two kilometers away from an all-weather road, and 20 percent of rural habitations must walk for miles to obtain safe drinking water, have access to it for only a few hours a day for much of the year, or have no access at all.”

“Instead, India should seek to empower its villagers and nurture entrepreneurial activity, while also taking advantage of its strengths in the private sector. Corporations need a seat at the table of village reform—even multinationals, because the task of reform is so enormous. Outright foreign direct investment, by Düsseldorf-based Metro AG, for example, should be welcome, as should joint ventures, like the one between Bharti Enterprises and Wal-Mart Stores. Such businesses, together with local ones, can lay the foundations for a modern agricultural supply chain linking the village farmer with the urban market.

Only then will India, and not just its global cities, rise.”

About the Author
Tarun Khanna is the Jorge Paulo Lemann Professor at Harvard Business School and author of Billions of Entrepreneurs: How China and India are Reshaping Their Futures and Yours, published in 2008 by Harvard Business School Press and Penguin Books India. This is an adaptation by the author of a broader perspective on India and China that appeared originally in an online publication of the Center for the Study of Globalization at Yale University.

You can read the full article here:

http://www.mckinseyquarterly.com/Nurturing_entrepreneurship_in_Indias_villages_2237

Net net: don't forget about rural economies! In fact, according to the USDA, rural America is home to a fifth (49 million) of the nation's people, comprises over 2000 counties, and accounts for 75 percent of the America's land.

- Elizabeth