TinyTech Plants: Is Small Beautiful?*

TinyTech Plants: Is Small Beautiful?

At Rajkot, Gujarat, India, on a hot and humid afternoon of April 2014, Veljibhai Desai, the 72-yearold mechanical engineer and law graduate, was conferring with his foreign clients as regards to the technical functioning of the steam engines at one of his factories – “Prayog-Mandir” (Experimental Temple). Since early morning, Veljibhai Desai was with his clients Carlos and Nicole, citizens of Sweden and Italy respectively. They were testing the new steam engine which generated electricity but had few reservations about its functioning. Carlos was interested in using the steam engine for motorbikes, while Nicole intended to use it for generating power in rural Italy. Although, the initial amount for the steam engines was collected in advance from the clients, they wanted to rule out the reservations about the engines. Carlos and Nicole intended to purchase the steam engines from Desai after confirming satisfactory performance of the engines. After a few trials, Desai resolutely conveyed to Carlos and Nicole, “Don’t worry, my friends. If at all my steam engine fails to perform satisfactorily, I will refund the full payment at once.”

All business dealings executed by Desai have always been backed-up by camaraderie, transparency and forthrightness. The splendor of small family-owned enterprises, Desai advocates that if competition is premised on fair terms, none of the bigger organizations can ever compete with small family-owned firms.

Finally, after many deliberations, the steam engines were purchased by Carlos and Nicole from Veljibhai and they also joined the list of satisfied customers................

TinyTech Plants: Background

TinyTech Plants is a proprietorship firm headquartered in Rajkot, Gujarat, India. The firm was started in 1982 by 40-year-old Veljibhai Desai, a mechanical engineer with a law degree (Exhibit I). The motive behind starting TinyTech was to develop and distribute machinery and technology that were simple and appropriate for the rural economy (Exhibit II)..........

TinyTech: Products

Today, TinyTech is engaged in manufacturing, exporting and supplying a wide range of agricultural process equipment (tiny oil mills, tiny palm oil mills, groundnut decorticators, coconut cutters, sunflower crackers, oil filter presses, potato and banana wafer plants, maize mill machines, popcorn machines, peanut butter machines, etc.) Another firm associated with TinyTech is Aadhunik Global Energy (Aadhunik) established in 2002. Aadhunik manufactures and develops a variety of renewable energy technologies (parabolic solar cookers, community cookers, large solar baskets for power and heat generation...........

TinyTech: Annual Turnover and Exports

Including the export business of Aadhunik, TinyTech has an annual turnover of ₹4 crore. Nearly, 20 people directly work in TinyTech’s factory; around 200 people work in various ancillary operations. The company’s business model is predominantly driven by exports and its products are sold in 109 countries..........

Cottage and Small-Scale Industries in India

Cottage and small-scale industries play a leading role in the economic development of the developing countries like India. In India, cottage and small-scale industries are important particularly from the perspective of employment opportunities, fair distribution of national income, balanced regional growth and development of rural and semi-urban areas.............

Appropriate Technology: Gandhian View

“...When once asked, “Do you hate machines?” Gandhi answered, “No”. While my body itself is nothing but meticulous machinery, how can I dismiss it? My spinning wheel or even this toothpick, for that matter, is a machine. I hate not the machines, but this growing passion for machines. I hate the passion for the machines which work upon diminishing man power. Some talk about machines which could spare man power when thousands of people are thrown jobless on the streets. Yes, I want the human toil and time to be spared, not just for a sect of people but for humanity...............

Socio Economic Benefits of Tiny Oil Mills

Desai favors small scale industries as promulgated by Mahatma Gandhi. Desai enumerated the benefits of small scale industries by focusing on tiny oil mills.

“About 500 of our Tiny oil mills are working in the radius of 180 km of Rajkot city. Our Tiny oil mills are working on custom milling basis, i.e., people come with the groundnuts and empty tins for filling oil, get it crushed into oil and oil cake, pack the oil in 16 liter tins, seal them and take away the oil and oil cake for consumption. They pay only labor charges to oil millers..............

Way Ahead: Desai’s Dilemma

The direct advantages in terms of socioeconomic benefits through decentralized industries are ample. Exemplifying on this fact, Desai explains about his initiatives of supplying a micro power plant to a village in Saraikela-Kharasawan district in Jharkhand (Through NGO Jharkhand Alternative Development Forum). In terms of finance, micro power plant has low operating and set up costs as compared to huge power plants (Exhibit IX and X). The benefits of these micro power plants are numerous in terms of employment and infrastructure development in villages............

Exhibits

Exhibit I: Veljibhai Desai’s – Life Journey

Exhibit II: Objectives of TinyTech Plants

Exhibit III: Desai’s Convictions

Exhibit IV: Service Design Model of TinyTech Plants

Exhibit V: Performance of Small Scale Industries in India

Exhibit VI: Mahatma Gandhi’s Quotes on Rural Development & Industrialization

Exhibit VII: A Million Engineers in India Struggling To Get Placed In an Extremely Challenging Market

Exhibit VIII: Scope of Tiny Industries in India as Foreseen by Veljibhai Desai

Exhibit IX: The Village That Makes Its Own Power

Exhibit X: Estimated Cost of Micro Thermal Power Plants

Annexures

Annexure I: Exports of TinyTech Plants, Rajkot

Annexure II: Tiny Steps of TINYTECH

TinyTech Plants: Is Small Beautiful?

Synopsis

This case study depicts the relevance of Gandhian economic model in present economic turmoil, case essentially highlights the need to decentralize the heavy industries and enhance the endeavors towards social entrepreneurship in India for viable and sustainable economic growth. The case is written in the open case format and lucidly describes the social entrepreneurial journey of a staunch Gandhian, Veljibhai Desai. The case timing is as of April 1st 2014 but the students are stimulated to go beyond the information presented in the case and collect additional information, on social entrepreneurship, Gandhian economic model, Gandhi’s ideology on Industrialization, Appropriate Technology, etc. The case study starts with a dilemma of Veljibhai Desai about promoting the Gandhian idea to the youths; it further outlines the growth and merit of running a smaller enterprise with strong social networks as advocated by Veljibhai Desai. It demonstrates how TinyTech in spite of being smaller firm developed capabilities to develop products, supply chain and in true sense became a local firm exporting to about 109 countries all over the world.

Expected Learning Outcomes

At the end of this case study discussion, students should have:

• • developed a good apprehend on social entrepreneurship and Gandhian economics
• • learnt that the social enterprises, to be successful, require the same primary elements as commercial enterprises: an opportunity, an entrepreneur or entrepreneurial team, and resources, interacting in a particular context
• • apprehend that contrary to commercial entrepreneurship, the social value proposition is at the crux of the social entrepreneurial model
• • reviewed the learning in terms of major concepts, frameworks, and checklist of questions pertaining to social entrepreneurship and apply the same in the context of comprehending, analyzing, and developing recommendations in a present economic scenario

Case Positioning and Setting

This teaching case study is fundamentally designed for a bachelor or master course in entrepreneurship, where social entrepreneurship is included in the program. However this case can also be used for teaching importance of frugal innovations, importance of small scale industries, and Gandhian economics..............