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Gandhigiri for sustainable growth

Posted on September 30, 2010 | Author: Ram Nidumolu & Sharmila Paranjpe | View 241 | Comment : 10
Innovation at leading Indian companies suggests that inclusive growth
policies are beginning to have the desired effect in rural areas and on
the urban poor. But much more is required from the government and
industry.

In two days, we will celebrate the 141st birth anniversary of Mahatma Gandhi. It is only appropriate that we
consider how his life’s core principles relate to our own economic times.

Historian Ramachandra Guha has described Gandhi as the single most important influence on the
environmental movement in the country.

His assertion, “the Earth has enough for everyone’s need, but not for anyone’s greed” has been repeatedly
invoked by environmentalists. He made an equally-prescient statement, “It took Britain half the resources of
the planet to achieve (their) prosperity.

How many planets will a country like India require?” These Gandhian ideas go to the heart of concerns about
the sustainability of economic growth in the world in general, and India in particular.

We are now at a juncture on the road to growth where we face two choices.

The first is unconstrained economic growth that enables us to race ahead to the future, but with significant
downsides such as weakened long-term economic security and well-being due to non-renewable resource
constraints, climate change and environmental damage.

The other path is sustainable growth, which is the use of sustainability-based innovations to develop
products and services, business models and platforms, and infrastructure.

Sustainable Growth 1.0, 2.0, 3.0


In the June 2010 issue of Harvard Business Review, Prof C K Prahalad made one of his last contributions to
management thought by introducing, with his co-author R A Mashelkar, the notion of Gandhian innovation.

These are business innovations that embody two core principles that Gandhi lived by: affordability and
environmental sustainability.

We can add a third core principle in Gandhi’s philosophy: freedom from authoritarian control and a general
distrust of the central authority. Sustainable growth can be considered Gandhian growth because its
business innovations are rooted in these three principles.

As illustrated below, the mid-1980s to the mid-1990s in India may be described as Sustainable Growth 1.0. In
this period, the easing of many government controls led to business, technology and policy innovations that
initiated decentralised growth in the economy.

These changes, although partially implemented, illustrate the first core Gandhian principle: decentralised
control. The adoption of these innovations then exploded in the next decade, 1995-2005, and resulted in a
boom in economic growth.

This decade also planted the seeds for innovation that initiated inclusive growth by making products and
services more affordable to the vast majority of Indians.

In turn, Sustainable Growth 2.0’s rapid expansion will likely be the decade 2005-2015 in which we are halfway
through, fuelled especially by business innovations that target bottom of the pyramid. It, therefore, illustrates
the second core Gandhian principle, affordability, and has now become the national agenda.

Our research of innovation at leading Indian companies — including Hindustan Unilever, ITC, Larsen &
Toubro, Novartis and Sanofi-Aventis — suggests that inclusive growth is now rapidly reaching millions of
consumers in rural areas and the urban poor.

These innovations span consumer products, procurement, infrastructure construction skills and healthcare,
and use a variety of business models to make them scaleable.

They may be considered as ‘next-practices’ platforms, because of their ability to scale across markets and
regions.

These companies are also well-positioned to extend their innovations to Sustainable Growth 3.0, which may
be described as eco-friendly growth.

In this phase, innovations from previous phases get even more deeply embedded in business practice, and
also result in eco-friendly innovations being deployed.

Leading companies such as Cadbury, Cosmos Ignite, Future Group, Mahindra & Mahindra and Wipro are
implementing next-practices platform innovations that span sustainable farming, energy-efficient lighting for
the poor, consumer recycling through retail, eco-friendly construction and transportation, and energy-
efficient IT, respectively.

These 10 companies are the tip of the eco-innovation iceberg, and illustrate Gandhi’s third core principle of
environmental sustainability.

It is encouraging that the government is finally putting together some of the policy pieces required for
accelerating Sustainable Growth 3.0.

These include measures such as the carbon tax on coal to fund clean energy, the perform, achieve and trade
(PAT) mandate for energy-intensive facilities to reduce energy consumption, the National Solar Mission to
implement 20 gw of solar power by 2022 and several other initiatives announced earlier this year. But the
devil, as always, is in the implementation of these policies.

There is much more that needs to be done. As Nandan Nilekani points out in his book, Imagining India,
sustainable growth will be more effective when there is greater local control and clearer property rights over
local environmental and energy resources.

When it happens, it will represent a deepening linkage of the Gandhian principles of decentralised controls
and affordable access with that of environmental sustainability. Sustainable Growth 3.0 is then likely to
escalate rapidly in mid-2010s to mid-2020s.

Drivers of successful change


Market demand is a greater driver of new behaviours than regulations, especially if the latter are poorly
enforced. For Sustainable Growth 3.0 to accelerate, eco-friendly growth needs to be viewed as a business
opportunity, rather than merely a reduction in risk from non-compliance.

Sustainable Growth 2.0’s lessons are instructive: inclusive growth took off because companies realised it
was a great opportunity to do well financially by expanding markets while simultaneously doing good to
society.

There is another big driver of change that Gandhi used masterfully, which proponents of Sustainable Growth
3.0 could do well to emulate.

It is the creation of an identity around the intended change that the average Indian could easily relate to
during the Independence movements.
It represented a fearless Indian throwing off a colonial yoke and was created through symbols such as the
charkha and the lifting of sea salt at Dandi, new words and phrases such as satyagraha and Quit India, and
by anchoring in values such as ahimsa that define our heritage.

Perhaps we should take a leaf out of the Mahatma’s notebook to locate where to search for such an identity.
He did not believe that, traditionally, distinct spheres of life — such as economics, nature, personal health
and habits, and society — should be kept separate in pursuing his work.

Instead, he sought to integrate them into his way of being and doing. There is a sphere we have overlooked
until now in this essay. It is our own enduring Indian culture.

More precisely, it is our ancient worldview found in the Upanishads relating humanity to nature, which
transcends Hinduism itself and is secular in its outlook. It was the foundation of the Mahatma’s life and
guided his every action.

We can begin with an idea that the Mahatma considered a mahavakya (great saying) in the Upanishads. It
occurs in the very beginning of the Isa Upanishad, Tena tyaktena bhunjitha.

It is the identity of a steward for this world, rather than an owner who could do as he pleases with it. Its
extended meaning, “renounce ownership of the world and enjoy”, embodied Gandhi’s life.

Ultimately, sustainable growth is about growth through stewardship and conservation of society, nature and
its resources. This view has been an integral part of our culture for over 3,000 years.

It is reflected in our innate thriftiness in everyday life, which Gandhi again exemplified through the many
stories of his frugality.

It is also evident in the numerous professions that make a living out of recycling and reuse, such as the local
kabadiwala on every street.

However, as our culture becomes more oriented to acquisition, especially in a rapidly-growing economy, we
risk letting go of these habits that have served us well in the past.

There is another analogy we can draw from the Upanishads regarding unconstrained and sustainable
growth. In Katha Upanishad, the god of death Yama tells the boy Nachiketas of the two paths that lie before
us: the path of pleasure (preyas) and the path of preference (sreyas).

The former is sweet initially but soon turns to poison. The latter is like poison initially but then turns to
nectar that provides sustained joy.

Yama also compares this path to walking on the edge of a razor (ksurasya dhara), but it gets easier as we
progress on it.
This search for a greater path of conduct in life occurs throughout the Upanishads. Sustainable growth is
like this greater path: difficult initially, but good for the world and good for the business enterprises that stay
with it.

The sages who composed the Upanishads over two millennia ago were visionaries like Gandhi. We can learn
something enduring from them, and from this more recent Mahatma.

While many leading Indian companies are making a good start, we need to build a broader base of support to
scale these efforts throughout Indian businesses and consumers.

By tapping into the sense of stewardship and conservation already embedded in our national culture, we can
build a national identity around this greater path of sustainable growth.
Inclusive Growth Innovations
Pureit (Hindustan Unilever)
Consumer products for mass consumer
Range of products to enable safe drinking water by protecting from water-borne diseases

e-Choupal (ITC)
Rural markets
Procurement services, rural distribution of goods and services, financial services (insurance & credit) and
rural retail stores

Construction skills training (Larsen & Toubro)


Underprivileged youth
Increase training and employability of youth in construction jobs through training institutes

Arogya Parivar (Novartis)


Health services for the poor
Promote healthcare among the rural poor through direct education

Prayas (Sanofi-Aventis)
Health services for the poor
Promote healthcare among the rural poor by training medical practitioners

Eco-Friendly Innovations
Sustainable cocoa farming (Cadbury)
Coconut farmers
Use of cocoa as an intercrop between coconut or arecanut in otherwise-unused land

The Great Exchange (Future Group)


Retail customers
Encourage customers to return unused items in several categories in exchange for coupons

MightyLight (Cosmos Ignite)


Poor in rural and urban areas
Solar LED lighting and micro-energy for domestic use among the poor

Mahindra Reva (Mahindra & Mahindra)


Automotive customers
Electric vehicle technology, including electric drive train, through majority stake in Reva

Wipro Green PC (Wipro)


Computing customers
RoHS-compliant, Energy Star rating 5, ranked #2 green electronics brand globally by Greenpeace

Name of innovation (name of company), targeted market & innovation description These are illustrative
innovations considered in-depth by the authors. Many of these companies have several innovations across a
variety of categories spanning both inclusive and eco-friendly growth

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