Indian Companies’ Embrace of Shared Value Project Will Boost Inclusivity
Monday, October 31, 2011
India is a country of stark contrasts. In recent decades, the sub-continent has experienced a rapid rate of economic growth, and has risen to become a key player in the G20. However, this stands in stark contrast to the fact that India still ranks 119 out of 169 countries on the Human Development Index. Widespread poverty, ill health and malnutrition are but a few of the critical issues that still plague hundreds of millions of India’s citizens.
Inclusive growth, ie ensuring that India’s economic development lifts all boats, is a critical national priority. Hardly a day passes without coverage of this topic in the mainstream media. One key focus of this public debate has centered on the role of Indian corporations in enabling inclusive growth. Traditionally, corporate social responsibility (CSR) has been the primary mechanism by which corporations in India have contributed to social development. The obligation of corporations to society is deeply ingrained in the DNA of Indian companies – from early industrialists such as the Tatas to newer age technology giants such as Infosys and Wipro, Indian companies have gone over and beyond the call of duty to better the welfare of their employees and communities. This approach however, has not been successful at creating large scale systemic solutions to India’s most pressing social issues. Arun Maira, the prominent member of India’s planning commission, in his speech at the Global economic symposium, likened the prevalent approach to CSR to “rearranging the deck chairs on the Titanic”, and suggested instead that it was “the course of the Titanic itself that must change”. Creating shared value is an alternative path to traditional CSR that can help change the course of this Titanic.
For our most recent publication on creating shared value in India, FSG researched shared value efforts in India – and to our surprise found many innovative efforts that are creating economic value while contributing to meaningful and sustained social impact at scale. In healthcare, companies such as General Electric and Vaatsalya are creating shared value by extending rural access to healthcare and developing innovative medical devices tailored to low-income populations. In agriculture, companies such as Jain Irrigation and Amul are increasing agricultural productivity and collectivising small and marginal farmers while generating lasting economic value. Finally, financial services companies such as PayMate and The State Bank of India are working to bring formal services to the unbanked.