ANDHRA ENTREPRENEURSpast, present and future

A.S.RaoPresident

Indian Innovators Associationindiainvents@gmail.com

A limited view of Andhra history from 1830 to 2030

Guntur – my home district in 1830

• Population- about 5 lakhs,• One thirds of revenues were sent out of India

every year and land revenue is the most important revenue of Indian revenue. The burden of taxation falls heavily on cultivators of soil. They can save nothing in years of good harvest and every year of draught is a year of famine.

Great Guntur Famine

• In 1776 British acquired the delta of Godavari and Krishna. From that time for 80 years famines regularly occurred destroying the people.

• Guntur Famine – 1,50,000 people died of starvation, also 74,000 bullocks, 1,59,000 milk cattle and 3,00,000 sheep & goats.

Images

Images

Indentured labourers

Britain abolished slavery in 1834. This created demand for Indian indentured labourers .They were sent, sometimes in large numbers, to plantation colonies producing high value crops such as sugar in Africa and the Caribbean. Many Indians agreed to become indentured labourers to escape the widespread poverty and famine in the 19th century.

Indentured Indians arriving in Colonial Natal

Migration to Burma• The Telugu speaking people in Burma were

known as “Coranghees” since theyt migrated from a port called Korangi.

• As early as 1865-66 large-scale emigration from Vizagapatnam to Lower Burma averted the spread of famine from neighbouring areas into that district. In 1896-97 the number of emigrants from Ganjam to Burma doubled and those from Vizagapatnam tripled as a result of widespread famine in these districts.

Migration pathways

Reasons for poverty & migration• Zamindari system worsened the flight of poor peasants

because of high taxes.• Frequent famines. Lack of employment. • Shrinkage of cottage & handicraft industries owing to

introduction of European factory produce.• In 1840 it was mainly barbers, washer men, tailors and

weavers who had gone to Burma, while in 1863 majority of the emigrants were weavers and in the twentieth century emigrants were drawn from the agricultural communities.

• Emigration became an escape route and a habit.

First Generation Entrepreneurs:Famer Capitalists of Coastal Andhra.

Modern history of this region begins with irrigation systems off the Krishna and Godavari rivers. These canal irrigation schemes virtually obliterated subsistence agriculture and created a near mono-crop economy in the deltas, transforming them from areas of frequent famine to ones of intensive wet rice cultivation.

Sir Arthur Thomas Cotton

Zamindars and Landlords• The early industrial entrepreneurs of coastal

Andhra were mostly zamindars and large landlords.• For example, the new film industry in Madras was

heavily financed by zamindari families of the region, notably the Raja of Mirzapuram.

• Most of the new industries in the region were agro-based. Common were sugar factories-but other enterprises such as financial institutions and transport companies were also floated by wealthy landlords.

Raja Venkat Rama Appa Rao Bahaddoor alias Mirzapuram Raja.

Rayagada sugar factory (1936)

It was built with an initial capital outlay of six lakhs by V Ramakrishna. The company acquired land in the Jeypore region and encouraged experienced sugarcane cultivators to migrate to the area to produce cane for the factory. The company later expanded into mining, and in 1958 established a ferromanganese plant with an investment of rupees sixty lakh

Velagapudi Ramakrishna, ICS

Mullapudi Harishchandra Prasad

New Farmer entrepreneurs

These new entrepreneurs invested primarily in small non-industrial types of business requiring low capital outlays, such as construction and public works contracting, real estate development and speculation, and transport. Trade and agro-industry continued to be the major types of business pursued by rural-based families.

Sri Ramadas Motor TransportCompany (SRMT)

Started by a group of local cultivators in Kakinada in 1944. Originally a small passenger transport company with a few buses running in the rural areas around the town, it later expanded into motor vehicle parts and service, acquired the Tata lorry dealership for the area and some other machinery distributorships, and started a production unit. It is now the largest firm of its type in the region.

Abolition of Zamindari

• The abolition of zamindari estates in 1949 induced the more enterprising zamindars to convert their assets into industrial capital.

• Members of the Kapileswarapuram zamindari family, for one, established a textile mill in Kakinada, and later expanded into sugar and other industries.

Investment of agriculture surplus

• Very small percentage of the surplus produced in the region is re-invested in agriculture.

• Rice mills, rice trade, Trade in agricultural inputs (fertilizer, pesticides), contracts for government projects in the rural area, 'chit funds, oil mills, dal mills, factories for drying and grading tobacco, cotton gins and presses etc.

Nagarjuna Sagar Dam gives birth to Infrastructure Kings

• Navayuga, Soma, CMR, GVK, IVRCL, Lanco, Maytas, Nagarjuna Construction- all started as small contractors.

• In 2002-3, Nagarjuna was the biggest and ranked 11 in India. 2007-8, three of them Nagarjuna, GVR, IVRCL , Maytas rank among the top 10 in India and top 15 has 6 Andhra firms.

Nagarjunasagar Dam

Vallurupalli Nageswararao

Rajivgandhi Airport

Grandhi Mallikarjuna Rao

Dr Bhogaraju Pattabhi Sitaramayya founder of Andhra Bank

Factor behind success of first generation entrepreneurs

• Andhra entrepreneurs are different from Marwari and others who were traders by profession.

• KG belt is not the first to be irrigated. Agriculture surplus always do not produce entrepreneurs.

• Andhra farmer entrepreneurs success was based on their roots as soldier-peasants, cultural influences and empowerment of women in the community.

Second generation Andhra Entrepreneurs: Technopreneurs

• Drugs• Vaccines• Engineering• Media• Corporate hospitals• Corporate Education

Drugs

Dr Reddy Labs: Kallam Anji Reddy

Vaccines

Bharat Biotech International: Krishna Ella.

Engineering

Amar Raja Batteries: Ramachandra Naidu Galla

Media

Eenadu group:

Corporate Hospitals

Appolo Hospitals: Prathap C Reddy:

Corporate Education

Narayana Group of Educational Institutes:

Factors behind success of second generation Andhra Entrepreneurs

• Heavy investment in education by middles class aspiring parents.

• Deep professional knowledge.• First mover advantage.

SME gloom and IT boom

• Many small enterprises became sick due to partnership problems, inefficiency , strategy built on scarcities / license became irrelevant.

• Y2K boom opened doors to USA.• Popular Strategy -Land in Andhra- House in

Hyderabad- Job in USA.• Capital migrated to Hyderabad.• Young people left villages.

Immigration to USA

AP youth in USA

The future

• Andhra in 2030• Andhra entrepreneurs in 2030- Third Generation Digital Entrepreneurs of Andhra..

Andhra in 2030.

Swarnandhra Vision 2029Growth Engines

Agriculture : Rice, Dairy, Poultry, Horticulture, Fisheries and Agro-industry;Industry: Infrastructure, Construction, Garments, Leather Products and Other Export-oriented Industries, Mining, Pharmaceuticals and Smallscale Industries;Services: Information Technology, Knowledge-based Services, Tourism, Logistics, Small-scale Services, Healthcare and Education.

E-pragati- 72 projects, 14 packages

The future of Jobs

Job reduced in- administration, manufacturing, extraction, construction Job increase in- Computers, engineering, architecture, finance.Factors- Mobile internet and cloud technology, Advances in computing power and Big Data , Rapid urbanization, transition to a greener economy, New Energy technologies, Internet of Things, Longevity and ageing customers, Women’s rising aspiration…

Opportunities : Tourism

Travel & Tourism startups

• USA- 1974 companies, 1113 investors.• Oyo Rooms- Ritesh Agarwal, is the founder

and CEO of OYO Rooms, dropped out of college.

• As of November 2015 it has 4,000+ hotels (more than 40,000 rooms) in 170+ cities of India.

• The company is valued at Rs 2500 crores.

Global Travelers

• 50 million outbound travelers; $40 billion• Thomas Cook is an established player. Make My

Trip is a startup.• Airbnb- Airbnb hosts share their spaces in 190

countries and more than 34,000 cities. All you have to do is enter your destination and travel dates into the search bar to discover distinctive places to stay, anywhere in the world.

Startups in Logistics

• Logistics startups received $617 million funding in 2015.

• Ola Cab is a taxi service aggregator. Similar is Shipping Exchange, the two-year-old startup, is trying to make shippers discover real pricing, across all ports in India, on its portal, while exporting or importing a product. Shipping Exchange brings freight forwarders, non-vessel operating common carriers (NVOCCs) and shipping lines on a common platform.

Startups in Hardware

IOT in Agriculture

Orchard pest control

Farmers can monitor insects online using the camera and sensors, and set scheduled releases of the pheromones to confuse the mating habits of the insects and drastically reduce the amount of pests.

Vertical Farming

Farmer innovations

Summery

• Farmers are first generation entrepreneurs from Andhra.• They made use of irrigation system, worked hard and

used the savings to educate their children and invested in other revenue generating activities available in their region.

• They migrated, invited and uninvited, to buy additional farm lands outside Andhra.

• Factors that shaped their outlook are; roots as part time soldiers, women empowerment and social reforms.

2nd generation entrepreneurs- Professionals

• Second generation entrepreneurs are professional, first movers in their field.

• Factors favoured their success- good education, strong domain knowledge, community support and market opportunity.

• Like first generation entrepreneurs of Andhra, second generation also did not compete with entrenched traders.

Third Generation Andhra Entrepreneurs- Digital Entrepreneurs

• Building on the past and leveraging global linkages, Digital Entrepreneurs will dramatically change the service and agriculture sector.

• Favorable factors: Political Leadership, IT savvy customers, consumption economy and large shift from rich rural to quality urban areas in Andhra.

Thank You.