What is India's India?

Some five years ago in a Delhi Hotel, a senior french executive asked me the question 'What is India's India?' 

I blinked, of course, not knowing where he was going.

He explained 'I mean, where would India outsource its work since your growing costs seem to be unsustainable..would you go to China, Philippines, or Africa perhaps?' 

Having not thought about such a topic in advance, I mumbled something about how India was still competitive compared to USA and Western Europe and how we would not have such an issue for another 10 years. 

There was a better answer and that lay in small-town and rural India. Here costs were (and would likely continue to be) as little as 20% of what it is in big city India (Bangalore, Chennai, and so on). Of course, Indian outsourcers would slowly but certainly tap into this vast and almost untapped resource pool when the need arose. There would be no need for Indian companies to go to China or Philippines for cost reasons. India could vertically integrate itself across the services value chain and not have to look elsewhere for cost reasons (I stress cost reasons, because there are other good reasons to deliver services out of China or Egypt for example). 

This recent story from the New York times shows one such initiative and the fundamental changes it is bringing to people's lives in small Indian villages.