To introduce Net Impact in brief, it is a nonprofit membership based organization for students and professionals interested in using business skills towards making the world a better place. It has over 200 chapters worldwide and a membership base of over 10,000. At the ISB we are over a 200 member strong club and have various focus groups working on NGO Capacity Building and Pro Bono Consulting for non profits (we recently concluded 12 consulting assignment for NGOs based out of Hyderabad); a focus group on social entrepreneurship (one that is responsible for spreading awareness about social ventures, arranging for internal and external speaker sessions, provide networking platforms); one on campus greening (we have recycled paper up to 1 ton so far and introduced printer optimization techniques that has saved us about 20% paper from last year’s figures already) and yet another on community initiatives that undertake various measures such as scholarships to the underprivileged children, voter registration and awareness drives, blood donation and eye donation camps, flood relief campaigns and various sensitization drives.
To come to the topic at hand, why is this topic important? Why is inclusive growth important? India already is projected to have the world’s second largest GDP growth rate for 2008-2009 and will surpass the world’s largest economies in the next 25-50 years. However 800 million are still to participate in the country’s growth and benefit from it directly and therefore we still need solutions to mainstream social change, to enhance people’s productivity and their wealth creating capabilities and these solutions need to be designed for scale, executed at scale and sustained at scale.
The pace of government reforms and work done by NGOs is still very slow (today India has 1.7 million NGOs) – and the slow is evident you talk about the last 50-60 years. Talk about public access to healthcare, education, food and water, power and energy and even infrastructure. What we have missed out on is getting people involved and bringing the power of markets to the grassroots. So what I think is required is that the private sector needs to get involved and its participation has to go much beyond that of the traditional approach of CSR.
SMEs for example(the largest employment generators in the country) face various challenges: one that is that they face a severe problem in accessing financial resources (either debt or equity) and another that they also lack access to knowledge networks and to good managerial talent.
Also let us see urbanization: clearly the world is getting urbanized. In 1800 – 3% of the world’s population were in cities; in 1900 it went up to 10% and in 2000 it has gone to over 50%. And a bi-directional linkage between urbanization and growth has been clearly proven without doubt. People in cities are more than 20 times productive than their rural counterparts. China has 138 cities with a million plus population India today has only 35 and that is where I think India’s challenge in urbanization is also its greatest opportunity – we can today build for a population of 600 million an entire infrastructure from scratch and that is not something available to the US cities. And cities in the developed countries are notoriously inefficient in terms of sustainability or resource use.
If we really talk about new business models, there are various organizations that are doing fantastic pioneering work in achieving large scale social change. The Bill and Mellinda Gates Foundation spent about USD 260 million on only their HIV intervention program in India and they used standard business principles in achieving this change. They formalized data capturing and made it simple enough that even their frontliners could use. They also had a very strong focus on measuring the social impact that they were attempting to achieve and they spend about 10% that would be about USD 25-26 million on just measuring the impact.
Another example: Pratham is another organization with what someone would call an audacious target of reaching out to 200 million children and the good news is that last year they have been able to reach out to 20 million /children across 300,000 villages. And they have done this in just 14 years. Yet another example: IFMR Trust is a strongly mission driven organization whose rates of lending are much lower than others. They have a CCD or franchisee approach that keeps the costs of operations much lower than if it were operating a full-fledged bank branch. They also remove paper from the entire process and drive down costs of serving a customer to as low as possible.
So therefore I do think that big ideas will work, if you have the courage and conviction and if you believe in yourself and that is what leadership is and what India needs more of today. There is this quote by Confucius that comes to my mind often: “a superior man knows what is right, an inferior man knows what will sell”. Today I think most of what management teaches us or what politicians try do is how to sell. What we need is to first do what is right and then know how to sell it.
