Inclusive Business for Sustainable Growth

Inclusive Business for Sustainable Growth

Comments Off on Inclusive Business for Sustainable Growth

Ajit Pattnaik

GM & Head of Tailoring in Raymond Ltd.

The Corporate Social Responsibility (CSR) has now evolved and matured organisations look to it from a sustainability angle. Inclusive business is an integral part of sustainability. Inclusive business models are drawn when Companies identify and map the social, economic and environmental dimensions to their competitive context and redesign their businesses accordingly. Focusing on issues such as eco-efficiency, stakeholder engagement and social responsibility aligned to their existing core businesses is good, but it is still better when businesses go beyond the current business and invest in solutions and business models that will serve the underserved at the Base of the Pyramid (BoP).It is beyond selling to the poor. It is about empowering the billions by creating affordable solutions for them. It is about the business that focuses on the poor as business partners and innovators, rather than just as potential producers or consumers. Many reverse innovations made by Companies such as GEs portable low-cost ECG, P&Gs Vicks Honey Cough etc. have eased the lives of millions of people yet generated a lot of profits for the Companies. Asian Development Bank (ADB) defines Inclusive Business as a business entity that generates high development impact by (i) improving access to goods and services for the base-of-the-pyramid population (i.e., low-income people); and/or (ii) providing income and/or employment opportunities to low-income people as producers, suppliers, distributors, employers, and/or employees.

Innovations help companies stay relevant. Very often they need to disrupt their own product and services to serve a larger market. Godrej & Boyce Manufacturing Co Ltds Chotukool Refrigerator is an innovation towards inclusive business. This is a low-cost refrigerator targeted mainly at rural areas and poor customers of India. The product runs without a compressor on a battery and cooling chips. The company uses a community-led distribution model (as an alternative channel of distribution) to push for product growth. Its website says At Godrej, Disruptive Innovation helps us to meet the aspirations of millions of Indians and make a profound difference in their lives. All efforts are focused on raising the standard of living, livelihood and lifestyle of people, inclusively. The people in Rural India who have limited access to food preservation have found this low-cost refrigerator very useful. The small time shops are able to sell more by keeping eatables and drinks cool in it. The erratic power supply has limited effect as the Chotukool can stay really cool up to 3 hours without electricity. In fact It has led to the social inclusion of millions of households in India by improving their living standard, livelihood and lifestyle.

Another case in point is Tata Housing Development Companys Construction Skill & Entrepreneurship Development model. The Company in 2012 found that much of its housing projects were getting delayed solely because there were not enough skilled workers in and around project sites and also because of the incompetency of the sub-contractors working in its project sites. The Company in a strategic approach wanted to enrich the construction eco-system and created a large pool of skilled construction workers and a large group of skilled sub-contractors/entrepreneurs. These construction workers are migratory in nature and they do not stick to any specific projects/locations. Therefore an enriched eco-system is a boon for all. It also made a conscious effort to enroll socio-economically backward youth in these programmes. Thereby it skilled/upskilled more than 10000 youth from scheduled caste and scheduled tribe communities as skilled workers. It also created a pool of 200 efficient entrepreneurs in construction related fields from poor SC/ST communities. All these initiatives had a positive impact on timely completion of its housing projects. It also helped generating wealth for its sub-contractors and small-time vendors in its value chain who were from the base and often bottom of the pyramid.

In 2013, India became the first country in the world to mandate a minimum spend on CSR through provisions in the Indian Companies Act 2013. Because of regulatory requirements applicable companies are spending/allocating their 2 % of the three years average profits mostly on charity led projects and a few on sustainability led projects. However a growing number of organisations are looking the business from an inclusive growth paradigm and investing in inclusive business models.

Ajit Pattnaik is currently the General Manager & Head of Tailoring in Raymond Ltd. Pattnaik is a Post Graduate in Management from Jamnalal Bajaj Institute of Management Studies Mumbai. He has more than 30 years of experience in shared value creation, CSR, sustainability and development sector. As head of Tailoring in Raymond he drives sustainable value creation for communities and consumers through skill & entrepreneurship development and market linkage through social business enterprises. The 4 C programme (Capability, Capacity, Community Connection and Consumers) under his leadership at Raymond has gained considerable national attention as a unique Shared Value Creation/Sustainability Initiative . In the past he has headed CSR & Sustainability in Tata Housing and Tata Communications Ltd. He is credited with developing more than 250 successful micro-entrepreneurs from marginalised SC & ST communities during his stint at Tata Housing as a part of Tata Groups Affirmative Action Programme. He has earlier also worked in Govt of India and Govt of Odisha.

Raymond Ltds 4C (Capability, Capacity, Connect, Consumers) Tailoring programme is an apt example of Inclusive Business or Shared Value Creation. The profession of custom tailoring has seen a worrying decline in recent decades. The rise in popularity of ready to wear garments has reduced the need and desire for fitted garments making custom tailoring an unsustainable craft. Sharp decline in Ready-to-Stitch industry has adversely affected the lives of millions of Tailors and the age-old craft is now at the verge of extinction. The 4C Tailoring Programme (Capability, Capacity, Connect, and Consumer) is designed to arrest the trend, revive and enrich the tailoring ecosystem leading to enhanced Fabrics Sales. Through this platform, Raymond has been able to bring back the glory and glamour of tailoring slowly but steadily. It has been training/upskilling nearly 20 thousand tailors annually. Through its Raymond Authorised Custom Tailoring Hub model, it has created entrepreneurial avenue for many Master Tailors and has been able to bring about a paradigm shift in the manner the tailoring workshops function. This has led to better livelihood for Master Tailors, better wage and working environment for Karigars, better quality & higher satisfaction for customers, increased footfall for Stores. All these will obviously lead to an enriched eco-system with shift in demand towards Ready-to Stitch industry.

Essilors Inclusive business division 2.5 New Vision Generation (NVG) looks at business through a different lens. This for-profit division is responsible for deploying and scaling up the most viable inclusive business models that provide access to vision care for low-income consumers in under-served regions. 2.5 NVG products are now distributed in over 25+ countries across all continents including in India.

Its 2.5NVG(Improving Lives by Improving Sight) programme is another example of successful Inclusive Business. Essilor invests in training villagers as Eye Mitra, which is an Optician program and addresses triple objectives: to provide livelihood opportunities to rural youth, to cater to the vision care needs of the rural communities of the country and creation of a rural optician market opportunity. It is supported by BoP Innovation Lab which incubates inclusive business models and forms strategic partnerships across the public, private and non-profit sectors for serving the underserved through Inclusive Business models.

The base of the Pyramid Global Network is a consortium of organisations, labs and innovation centres. It helps as a think tank for like minded people and businesses who want their organisation/business to serve the underserved and poor in a way that makes business sense but also solves social and environmental challenges. There are now close to 30 BoP Labs and Innovation Centres around the world, Prof Stuart Hart(the co-author of the book The Fortune at the Bottom of the Pyramid written along with Prof C K Prahalad) is spearheading this initiative. In fact the 3rd Global BoP Summit was held at New Delhi from 18th to 20th April 2018, where in organisations/businesses from around 26 countries came around and discussed how to make businesses more responsible and more inclusive. Prof Stuart was leading the proceedings of the summit.

The Companies in India are increasingly embracing to the idea of Inclusive Business. In December 2017, the Shared Value Initiative India released the Inclusive Business List 2017 (IBL 2017) in a function at New Delhi. The list includes the enterprises imbibing the principles of inclusive businesses and showcased the best fifty enterprises in India that have demonstrated unique contribution in redefining the role of businesses in society. Globally the Shared Value Initiative curates the Fortune Change the World List and in the Indian context Shared Value Initiative India releases the Inclusive Business List. This list included among others Companies like Raymond Ltd, Amul and Fab india etc. Considering the keen interest being displayed by leading corporates, the future of Inclusive Business in India is going to be very bright. This discourse on Inclusive Business will remain incomplete if we do not refer to the Tata Affirmative Action Programme being practiced by all the companies of Tata Group. This is a programme aimed at empowering the SCs and STs of India through inclusive business modalities and processes. It has been encouraged and monitored at the highest level is the Group Chairman level and has been a great success too.

About the author

CSR VISION is India's (probably World's) first monthly magazine in print devoted to CSR and Sustainable Development for bringing together all stakeholders of SUSTAINABLE DEVELOPMENT at a global and local levels and act as a platform for promoting strategic CSR and sustainable development practices through dissemination of information and knowledge.