Sustainable Development – Now and Then

There are clear differences between the approach of previous generations towards sustainable development and that of today’s youth. The old model of people making money and waiting till the end of their lives to give it away is not acceptable to the new generation. Corporate social responsibility and philanthropy as concepts are less appealing to today’s youth, while profitable business models that inherently address social challenges are gaining popularity.

Although the growing role of youth leadership in sustainable development is a global phenomenon, young Indians still have some way to go. The highly competitive environment, educational system, and social pressure to build a successful (i.e rich) life, are some of the reasons that we see fewer young people engaging in sustainable development in India when compared to the more developed countries. The situation is similar in other emerging markets such as the BRIC countries and South East Asia.

While there are young people in India that choose to pursue a career in social enterprise, the space is primarily dominated by Non-Resident Indians and people from the more developed regions. This trend is clearly reflected in educational programs – while most Business schools in Europe and the North America include social enterprise/sustainable development in their curriculum, this trend hasn’t caught on in India. The Indian School of Business is pioneering certain initiatives in the social enterprise space such as iDiya; however the IIMs and other management institutes are still to follow.

Another point to consider while comparing perspectives on sustainable development across generations is that the field of strategic sustainable development requires a multi-disciplinary approach, since the challenges being addressed are intricately linked together. So while the past generations focused on specializing in particular areas and excelling in those, today’s generation has the opportunity to draw linkages across disciplines and find integrated solutions to challenges, for example in the context of climate change.

Access to information through the internet, the social media revolution, global exposure through technology and travel based learning allow our generation to engage in the complex issues of sustainable development. Today young people are more sensitized to development challenges and risks, and they have the opportunity to collaborate through social media channels, especially Facebook and Twitter.

A small percentage of Indian’s today are able to take greater career risk, instead of following the traditional path. However, when compared to the number of young people in India, this number is still very small. To create this change, we need to focus our efforts on youth attitude and perspective. Education, extra-curricular activities, travel and other diverse experiences shape the world-view of young people. We need to provide experiences that develop responsible young leaders who work towards a sustainable future and in the process create a meaningful and successful life for themselves and their communities.

One such program is the AIESEC Ser Mas Program run in Latin America that offers businesses and young people the opportunity to be more competitive, increasing their knowledge and expertise in the areas of social and business entrepreneurship. Through international exchange programs, team and leadership experiences, and learning activities, the program develops talented and globally minded Ibero-American leaders whose knowledge and skills enable them to support and build social enterprises in the region.

Bombay, I hate you like I love you

Photo credits – Abhishek Sarda ‘On the streets of Bombay

Freeing Energy from the Grid

As one of the fastest growing free-market democracies in the world, India’s growth rate of 8.2% is likely to continue. With this growth, the gap between energy demand and supply is also widening. While the liberalization and privatization of the 1990s has transformed the Indian economy, its lack of focus on rural electrification is posing to be a huge challenge to India’s development process today. Various studies have shown that access to electricity has direct human and economic benefits. Not only is it a basic human need for quality of life, but it also fuels productivity and employment generation activities in rural areas. Today, more than 40% of the Indian population has little or no access to commercial electricity to carry out their daily routines. Globally, of the 1.4 billion people who do not have access to electricity, 612 million or 42% live in South Asia. India, Pakistan and Bangladesh constitute more than 90% of those lacking access to electricity. It is apparent from the Government’s efforts that the provision of secure, sustainable and affordable energy is a critical economic and human development challenge for the country. The role of renewable energy in India is no longer that of ‘alternate’ energy, but has become a mainstream solution, driven not just by the Government but by local enterprise as well.

In this context, off-grid energy solutions have taken on a larger role in addressing the energy challenge. Rural and remote areas in India are not connected to the national grid. These communities take to manufacturing their own power using a range of local generators including fossil fuels and renewable technologies such as wind, hydro, solar PV. Off-grid electricity often serves a dual purpose of providing affordable renewable power solutions to disconnected areas, as well as generating employment for the local community. In the past, market incentives for profit-seeking companies in rural electrification profits were extremely limited. Dispersed customers, higher cost of supply, geographical remoteness, low consumption and low ability to pay are some of the other barriers that have restricted the entry of private players in this space. However, led by a generation of young entrepreneurs, India is pioneering off-grid energy solutions today. These success stories pave the way for rural development and environment preservation. The uniqueness of these solutions is not just the innovative technology, but also the distribution, ownership and revenue models on which they are based. These stories are freeing energy from the grid, and lighting up the lives of millions of rural poor in India and in other parts of the developing world.

Husk Power Systems has changed the lives of 150,000 people in rural India, impacting 25,000 households and reaching out to 250 villages by installing 60 mini power plants that use discarded rice husks to generate electricity. Further, they have trained and employed more than 300 people to run and manage these power plants. By 2014, Husk Power Systems plans to impact 6,500 villages, save 750,000 tons of CO2, create 7000 local jobs and save over $50MN in cash for over 5MN people by replacing kerosene and diesel with its renewable energy technology. HPS is creating a paradigm shift in social enterprise where it pays the community in cash twice the amount it receives from them. To support HPS in achieving its ambitious targets, Acumen invested $125000 and IFC invested $375000 in them over the past year. [Husk Power Systems is a 2010 Sankalp Alum]

Promethean Power Solution’s prototype of a chilling center is helping farmers in rural India to boost supply by reducing spoilage. The technology is a solar- powered refrigeration system for cold-storage in areas that do not have access to the energy grid. Having won numerous awards, the founders of Promethean started off in a village in Goa and are now looking to expand their services across India. They received $10,000 funding initially, followed by a $1 MN investment. [Promethean Power Solutions is a 2011 Sankalp Alum]

Onergy provides complete renewable energy solutions to BoP customers in rural India by focusing on quality products and servicing and innovative distribution and pricing. Onergy’s main focus is on off-grid solutions through LED lighting, cooking and electrification with the aim of impacting 1 million lives by 2016. Project Zero Kerosene replaces kerosene lighting with off-grid solar LED lamps, Solar home lighting and Solar home electrification. Project Smokeless Village replaces traditional wood-cooking with efficient, affordable and renewable ways of cooking. Finally, the Project Decentralized Generation sets up Biomass Gasifiers of 10 – 100 KWe catering to local energy demands. Onergy is currently looking for investment to scale up operations. [Onergy is a 2011 Sankalp Alum]

D.Light Design is a story founded in inspiration derived from extreme hardship. The experience of using a kerosene lamp for light, inspired the founder to look for an alternative solution. D.Light provides a solar powered LED lantern that’s safe, affordable and bright. Today D.Light has 3 products priced between INR 500 to INR 1600, and sells its products in 30 countries including India. Education on renewable technology and last-mile delivery are the key challenges the company faces. Their long-term ambition is to impact the lives of 100 MN people by 2020. D.light has raised an investment of $5.5 MN from Omidyar. [D.light is a 2010 Sankalp applicant]

Selco enhances the quality of life of underserved households through the provision of sustainable energy solutions. Selco’s success has proved that poor people can afford and maintain sustainable energy technologies and that profitable social enterprise is a viable business model. Since 1995, Selco has serviced and financed 115,000 solar systems increasing human productivity, creating pivotal financial schemes for the poor to access solar technology, generating awareness about solar power, and improving the quality of life of millions. Selco not only customizes its technology to suit customer requirements, but provides high-quality service, as well as secures access to finance for customers. In 2011, the founder of Selco won the Ramon Magsaysay award.

My Connection to India’s Complex Growth Story

I come from a family of well-educated engineers, doctors and civil officers. I grew up in a sheltered environment, learning about the significance of a credible education, of stability, and of planning as far ahead as possible. Most of my extended family relocated to study in the U.S, and have built comfortable lives there. If I was writing this a decade ago, I might have had a similar story to share.

But I have grown up in the “new” India, and in this land of expanding opportunity, I chose the road less traveled.

In my 26 years I have traveled the world, started a not-for-profit, spent a month in the Antarctic and have chosen a career that attempts at “good” business. Turning down several opportunities to continue working abroad, I chose to return to India. The emergence of a pulsating, dynamic new India has triggered a reverse brain drain. Indians living in different corners of the world, who had gone looking for opportunity, chose to return to a vibrant, exciting land of promise. So did I. I came back to an India ‘whose faith in success was far greater that her fear of failure’. An India that was poised as the fastest growing free-market democracy in the world. Globalization with all its challenges and opportunities had created a country of paradox, success, failure and hope. The development of a young, new India in the face of a globalized world economy has greatly influenced my thinking and life choices.

India opened its doors to the global economy, transforming the lives and aspirations of its people. This evolution came to life with A.R Rehman winning two Grammy Awards, Kalpana Chawla being the first Indian-born woman to fly in space, and Slumdog Millionaire winning an Oscar. The world was looking at India with curiosity, and inter-cultural connections multiplied exponentially. Consequently, my dream of traveling the world became a reality. I worked with an international team in Rotterdam that led a global organization to achieve 45% growth in results. Our mantra was ‘Connecting to Deliver’, and we leveraged technology that supported people across the world to learn, share and achieve. I developed programs that mobilized youth to experience new economies and cultures. Recognizing these successes, I was awarded a scholarship to participate in a sustainability leadership program in the Antarctic. This would have been unheard of for a young woman in the India that was. The world had literally become my playground, and these experiences completely changed the way I viewed my country, my future and myself.

Today, India is riding high on its so-called “demographic dividend”. While India’s youth hold significant promise, the lack of education, inadequate infrastructure and skewed employment prospects present a daunting task. Young India needs empowerment, training and access to livelihood opportunities. Being a young Indian, my work has focused on youth mobilization for social impact. Recognizing the need for ethical and sustainable leadership, my work in AIESEC was directed towards exponentially increasing the quantity of leadership experiences the organization provided young people in India and globally. While leading the Global Entrepreneurs Program, my team trained aspiring Indian entrepreneurs and gave them a platform to develop business skills by interning with growing enterprises. Today my work leverages India’s demographic dividend through social enterprise. The enterprises I support are transforming the lives of unemployed youth through door-step business training, providing technology-based interactive education to disadvantaged communities, and generating employment in rural India through BPOs.

India’s entrepreneurial spirit is being harnessed in whole new ways. The world is attempting to learn from Indian innovation or ‘jugaad’ in Hindi, as a tool to find uncommon solutions to common problems. Earlier this year, a business acquaintance from Accra experienced Dharavi, Asia’s largest ‘five-star’ slum as part of a global initiative on Urban Poverty that I managed. He reflects that ‘Dharavi’s future is different from the slums in Ghana because Dharavi has the ability to grow organically through the entrepreneurial spirit that is being nurtured there.’ This observation isn’t limited to Dharavi, but is the energy that drives India. The deep-rooted ambition, innovation and risk-taking ability of my people set them apart. As an actor in India’s entrepreneurial story, the traits that define the country, define me. I’m an innovator; I practice the art of lateral thinking, of resilient creativity and of improvisation in the face of adversity. I enjoy trial-and-error and making things work with limited resources. I’m excited by opportunities with an element of risk, which I believe is critical to unraveling the complex challenges of today’s world. India’s tryst with ‘jugaad’, as one part of its entrepreneurial success, has deeply influenced my development in recent years.

My connection to India’s complex growth story is best described in these lines – ‘There are 2 India’s in this country. One India is straining at the leash eager to spring forth and live up to all the adjectives that the world has been showering upon us. The other India is the leash. One India says give me a chance and I’ll prove myself. The other India says prove yourself first and maybe then you will have a chance….’ The two India’s are slowly drifting apart – one rich, the other poor; one living in luxury while the other struggles to sustain itself. The future of our country depends on closing this gap. My work in social enterprise aims to increase conversions from one India to the other side. I co-create sustainable solutions with grass-root innovators to transform the less advantaged to assertive customers, thus contributing to build a more sustainable growth curve for the country. I support enterprises that provide low-cost sanitary napkins to rural women, deploy easy-to-use water wheels in villages, and empower rickshaw pullers to be owners. Choosing social enterprise has been a natural career path. With all its challenges, I draw immense satisfaction and learning from my work. The India phenomenon and my choice to return to it, has been a profound influence on my thinking, learning and actions.

Under the Imli tree:50 years of Vidyaranya

Vidyaranya 50 years

“Believe nothing…
…merely because you have been told it
Or because it is traditional,
Or because you have imagined it.
Do not believe what your teacher tells you
Merely out of respect for the teacher.
But whatsoever, after due examination and analysis,
You find to be conducive to the good,
The benefit, the welfare of all beings
That doctrine believe and cling to,
And take it as your guide.”
- The Buddha

Vidyaranya, a way of life that cherishes freedom, questions, diversity and friendship.
(As taken from the Vidyaranya 50 years publication)

What I learned at Vidyaranya | “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.” – Samuel Beckett

The Future of Social Entrepreneurship

From Beyond Profit

A few decades ago when Joe Madiath started Gram Vikas, he was labeled a “social activist,” a type of rebel. Today, he and other entrepreneurs have become lynchpins in the social enterprise sector. In the ’80s, social entrepreneurship was a concept in the making; now it’s at a pivotal point. Many entrepreneurs presented their visions of the sector’s future at the Villgro Unconvention 2010.

Social enterprise in its current avatar presents a business opportunity—a lucrative chance to marry commerce and change. Two decades ago when Shrashtant Patara, Vice-President at Development Alternatives Group, was looking for an opportunity to apply his technical skills in a business that has positive social impact, Development Alternatives seemed to be the only option available. Today, there are thousands of such opportunities in the market. The response that Yashveer Singh has received to the National Social Entrepreneurship Forum, or the growing number of applications that the Tata Jagriti Yatra receives only go to prove that.

Although the buzz is around market-based commercially viable solutions for change, Ashish Karamchandani, Partner at Monitor Group, believes that we are still in the relatively early stages. We have only a handful of successful models, such as microfinance. Further, it took microfinance 30 years to scale. Creating new scalable models is not easy, but it is what the social enterprise sector needs. Another question to ask is whether markets are the solution for everything? There are millions of Indians in the interiors of the country who are still in the pre-market stage—bartering for goods and services without currency involved. Investing in these millions and preparing them for the market stage, will be key in the success of scalable and sustainable social enterprises.

One of the important elements that has evolved in the space has been that of talent attraction. Yesterday, a fistful of individuals with passion in their hearts entered the space cautiously; today it is fashionable to work for a social enterprise. According to Bindu Ananth, IFMR Trust, the diversity of young talent that the sector is attracting is a fantastic sign. At the same time, as a sector we need to recognize the importance of bringing in professionals with the experience of building businesses, focusing and scaling.

Experts’ take: the future of social entrepreneurship

The future is about shifting from fail safe models to safe fail models—to be successful, we need to throw up as many balls in the air as possible.
—Shrashtant Patara, Vice-President, Development Alternatives Group

Taking on harder problems battled by more people will separate the high quality enterprises that scale from the mediocre ones.
—Bindu Ananth, President, IFMR Trust

The sector will see some sort of consolidation, as more enterprises compete for limited resources. Mergers and acquisitions and stress on transparency and better managerial practices will be upcoming trends.
—Yashveer Singh, National Social Entrepreneurship Network

There aren’t real failures in social enterprise, there are temporary setbacks. We need to build a support system for entrepreneurs who initially face hurdles, which will give them staying power and the ability to follow through.
—Joe Madiath, Founder & ED, Gram Vikas

Indian Microfinance Crisis of 2010: Turf War or a Battle of Intentions? – An Intellecap White Paper

Recent allegations against Indian microfinance institutions (MFIs) by the media and the State have thrown sector stakeholders into a crisis. Accusations against MFIs include coercive practices, lack of transparency, and “usurious” interest rates. These accusations have resulted in the passage of an Ordinance by the State Government of Andhra Pradesh (AP). Intellecap, an India-based social business advisory firm and publisher of Microfinance Insights, has released a White Paper in response to the crisis. Thought-provoking and informative, the White Paper analyzes the buildup to the crisis in AP, attempts to revisit some fundamentals of the business, and questions the effectiveness of radical approaches to multiple bottom-line business by the State and the media. We welcome your comments.

Download Intellecap’s White Paper here.

(Credit: Microfinance Insights)

Reliving Robben Island

“While we will not forget the brutality of Apartheid, we will not want Robben Island to be a monument of our hardship and suffering. We would want it to be a triumph of the human spirit against against the forces of evil. A triumph of of wisdom and largeness of spirit against small minds and pettiness; a triumph of courage and determination over human frailty and weakness; a triumph of the new South Africa over the old.” – Ahmed Kathrada, imprisoned for 26 years at Robben Island.

A short walk through Robben Island left me reeling from the blackness of oppression, despair and death that the place holds. Emerging to impart such generous wisdom after living in that environment for 26 years, fighting for dignity & life every hour of every day, is an indescribable legacy. Nine years later looking back, I realize that I still have a lot to learn from my experiences in South Africa.

‘a·part·heid’
Afrikaans : Dutch apart, separate (from French à part, apart; see apart) + Dutch -heid, -hood

Media meets Microfinance: The Big Debate, at the Srijan Financial Inclusion Forum 2010

Srijan

“The media does not understand the sector,” and “the media tends to sensationalize news,” are two of the most frequently heard comments when you ask Microfinance leaders what they think of the media coverage the sector receives. The reports about the state of microfinance and its practitioners in India have been unflattering, to say the least. ‘Carpet bombing’, ‘palming profits off the poor’ and ‘killing interest rates’ are the more common accusations flung at leading microfinance institutions.

On its part, the media believes that it is doing its job by bringing to light facts about the sector while institutions bristle at the apparent negativity, and believe that the media is reporting on an industry that it does not yet fully understand. However, the sector freely admits that reforms are badly needed and the media are in fact working to gain a better understanding of nascent industries such as microfinace.

Recognizing this disconnect, Intellecap, a thought leader in the sector, and host of the Srijan Financial Inclusion Forum 2010, aims to bring together the media and microfinance leaders in a candid face-to-face discussion. The aim is to narrow the gap in understanding and communication that currently exists between the two sides and find middle ground by thrashing out the differences. The aim is to enable the two sides to work together in building a better future for microfinance in the next decade – one that is transparent, client-centric and scalable.

Srijan is a two day action based Financial Inclusion Forum for top decision makers to define the 2020 roadmap for Indian Microfinance for the next decade, and assess innovative technology interventions to catalyze greater financial inclusion. Scheduled for October 7-8, 2010 at the Taj Lands End in Mumbai, Srijan aims to create a platform that sets the stage for an Advocacy Action Agenda for greater financial inclusion in India.

Intellecap is a pioneer in providing innovative business solutions that help scale profitable and sustainable enterprises dedicated to social and environmental change. The company’s unique positioning at the intersection of social and commercial business sectors, allows it to attract and nurture intellectual capital that combines business training of the commercial world with passion and commitment of the social world to create distinctive solutions that include best practices and principles of both cultures. Intellecap operates in multiple capacities in the social-commercial space: facilitating investments, providing strategic consulting and business advisory services, supporting operational planning and implementation, and developing information-sharing and industry-enhancing platforms that promote and build SUSTAINABLE, PROFITABLE and SOCIALLY RESPONSIBLE enterprises.

For more information please visit www.intellecap.com

Tribal Leadership & the Next Industrial Revolution

Seth Godin, marketing guru, entrepreneur, author and change agent is in our neck of the woods this week. Word on the street is that he’s in India to make a film on marketing to low-income communities. On Wednesday, Godin spoke to a captivated audience at the Indian School of Business in Hyderabad about the transformation of marketing and the art of leading a tribe to create change.

A decade ago, the image of an Indian farmer standing in the middle of a chaotic village market holding a shiny mobile phone was unimaginable; today, this is reality. These shifts and juxtapositions in our world are demanding a change in our role as doers and entrepreneurs and the nature of marketing. The marketing model of branding a cute mascot to death, interrupting people to push average products, and “spam-a-lot” is dying. It’s fast being replaced by marketers who give communities value, something to believe in, respect, and the dignity of choice. This transformation is the start of a second Industrial revolution.

“Tribal” leadership lies at the center of this revolution. Connecting a community or tribe of like-minded people and working with them to create change—like Jacqeline Novogratz has done with Acumen Fund or Anant Kumar has done at Life Spring Hospitals—is the new marketing. Trust, value and choice are the foundation of this movement.

Do you need to be a genius to invent a tribe or to find a tribe and lead it? Not really; not a genius like Einstein anyway! In fact, it all comes down to “Art.” Art is about doing work that matters, the act of creating human activity that changes people for the better. The factory model of interchangeable parts and replaceable people is being swapped for a focus on design, service and people. The opportunity is huge – the laptop is now the means of production and the internet has brought down the wall between products and the market. Replacing the fear of failure with curiosity and the courage to take on “emotional labor” (potentially tough challenges) are the two skills an agent of change needs today.

It is this tribal leadership and transformation of marketing, which will catalyze the movement of market inclusion at the base of the pyramid (BoP) in countries such as India. The end of poverty through market integration will come by supporting choice, not charity, and embracing dignity, not dependence.

Beyond Profit had the chance to sit down with Godin and find out more about his thoughts about marketing at the base of the pyramid (BoP):

Beyond Profit: What has the world overlooked when marketing to communities at the base of the pyramid, considering not a lot of multi-national companies (MNCs) have succeeded up until now?
Godin: So far we have treated people at the BoP the same as regular customers. It is only now that we are beginning to understand the different mindset and buying approach of customers at the BoP. The distinction between a need and a want is very clear to them. They will not just buy a product because it is INR5 (US$.09), they need to be extremely sure of the value it brings to their lifestyle. More than anything, they need to be given a choice to decide what product to buy.

Beyond Profit: Do you see conflicts with marketing products to the BoP that they don’t need or shouldn’t be spending their money on?
Godin: It is easy for marketers to trick people into buying a product, especially at the BoP where customers have maybe a year of buying experience whereas an urban middle income customer who has a lifetime of buying experience. In this age, marketers who give communities value, something to believe in, respect and the dignity of choice are the ones who will build successful organizations.

Beyond Profit: How is the role of technology evolving when marketing to the BoP?
Godin: The important factor is how technology is being used. The farmer with a mobile phone is a good example – he uses the mobile phone purely to connect for business and make a living, not to spend endless hours chatting with friends. Customers at the BoP will use technology to grow and attain success as long as it is affordable and available to them.

By Deepti Chadda for Beyond Profit