THE SPANKING new steel and glass buildings housing India’s exuberantly growing IT companies could be in Reading or California – until you visit the dusty, worn emergency staircases at the back, which seem 25 or 50 years older, as in a sense they are. Although new buildings are mushrooming, along with demand for contact centres to handle the world’s IT infrastructure and customer service needs, cranes on Indian building sites are rare. Much of the lifting is done by hand or hoist: hence the worn steps. During construction, the stairs serve as home to entire families of builders.

Although the glancing relationship – and glaring contrast – between the rich and poor Indias has struck onlookers for decades, the rise to world prominence of the country’s IT industry has given it new poignancy. Some go as far as to argue that up till now the financial benefits of India’s remarkable IT success have been felt as much by foreign companies and their shareholders as by Indians, apart from a wealthy few.

It wasn’t out of order, mused Nobel economics laureate Amartya Sen last month, to wonder whether the IT firms couldn’t be doing more to connect the rural poor to their thriving economy. India has defeated many attempts to bridge the divides of caste and wealth, but that just might be about to change, as the first generation of IT entrepreneurs starts to bring its wealth, confidence and technological prowess to bear on development. The results have implications far beyond domestic borders.

There is one reason for optimism here: self-interest. As well as the need to avert a backlash against the sector’s ostentatious material success, Indian IT firms are running out of suitable staff to run their burgeoning call centres. One option is to offshore, in turn, to Vietnam or the Philippines. But what if they could find a way of using the country’s 700 million rural poor – many undereducated or uneducated, and nearly half earning less than a dollar a day for a family of five?

This is the solution pioneered by the Byrraju Foundation, a not-for-profit organisation whose initial funding was provided by Ramalinga Raju, founder of India’s fourth-largest IT services company, Satyam. The foundation, which claims to be the first non-profit group run on Six Sigma quality lines, initially aimed to target rural health. But it rapidly became clear, recounts partner Verghese Jacob, that lasting health gains were impossible without better education and sanitation and that even together these advances were at risk unless they could be locked in place by new village livelihoods. The foundation now espouses the larger intent of securing ‘holistic, sustainable rural transformation’ by releasing human potential.

The need for sustainability has triggered real innovation – for example in water treatment, sanitation and waste management systems, which are handed over to be run, at a small profit, by the villages, and franchised on to others.

IT is employed for its ability to achieve rapid increases in the scale of these advances, and others in education, adult literacy and the virtual delivery of healthcare. Remarkably, the adopted villages (currently all in the central state of Andhra Pradesh, where Satyam is located) are achieving 100 per cent targets in literacy and coverage of diabetes and hypertension patients, and are driving startling improvements in India’s dysfunctional education system.

But the headline-grabber is undoubtedly the three village call centres the foundation has set up with Satyam (all its operations are handled through public-private partnerships, which leverage the initial funding four or five times). The contact centres are small, with about 100 places, and work two shifts, allowing employees, often women, to balance other commitments. Jacob reckons there is a pool of up to 90 million villagers to do data- and transaction-processing tasks such as reconciling expenses and sorting resumes.

So far, customers are Indian, but Jacob sees no reason why the centres shouldn’t move up the value chain to serve global customers who need help by telephone.

Suffering none of the employee churn that bedevils urban establishments, the village contact centres turn out work that is ’50 per cent cheaper and 25 per cent better’ than their city counterparts, claims Jacob.

So is this – along with an unrelated Satyam-supported non-profit initiative to establish India’s first comprehensive ambulance emergency service – just another worthy but token genuflection to corporate social responsibility? Perhaps not. First, say the foundations, the effort is sustainable. Second, taking a lead from the Indian software industry’s formidable quality reputation, the processes are proven, capable of being replicated and scaled up.

Development and transformation as proven routines? If that’s the case, it’s not only the poor who should be taking notice.

The Observer, 11 March 2007