Innovation has been linking profit with social purpose

A new vocabulary is doing the rounds. Bill Gates talks about ‘creative capitalism’. Michael Porter talks about ‘creating shared value’. Others are talking about ‘compassionate capitalism’. All these pertain to ‘doing well by doing good’ or in other words creating profits with purpose, and purpose really means the bigger purpose and that is social change, indeed social transformation.

To me, what is heartening is that young entrepreneurs are motivated by purpose over profit, according to new research published by HSBC on June 26 this year. In fact, the findings of the HSBC summary are striking. One in four entrepreneurs aged under 35 said they were more motivated by social impact than by moneymaking, compared to just over one in 10 of those aged over 55!

CSR is not new to India. Perhaps it is not widely known that the world’s first charitable trust was set up by Jamsetji Tata in 1892, a long time before the Andrew Carnegie Trust (1901), Rockefeller Foundation (1913), the Lord Lever Hulme Trust (1925) and the Ford Foundation (1936).

The establishment of the Tata Trusts was driven by the Tatas’ belief in giving back to the people what came from the people. In CSR 1.0. part of the surplus wealth goes back to people, either by free will (as in the case of charitable foundations or trusts) or because of the need to comply with government legislation (like India’s CSR law). We could consider CSR 1.0 as ‘doing well and doing good’. This means after one has done ‘well’ by amassing wealth, one turns to doing ‘good’ by setting up charitable trusts or foundations.

What one is seeing now is CSR 2.0, which does not replace  CSR 1.0 but complements it and brings a far greater impact by touching the lives of millions. One can call this ‘doing well by doing good’. This means ‘doing good’ itself becoming a ‘good business’.

I have direct evidence of this. Look at the winners of the Anjani Mashelkar Inclusive Innovation Award — an award I instituted in my mother’s name for innovations that will do good for society at large. All the eight award winners are young start-ups, begun by founders in their late twenties or early thirties. Let’s look at a couple of examples.

One award winner was UE Life Sciences led by young Mihir Shah, who developed a handheld device that is used for early detection of breast tumours. It is simple, accurate, and affordable. It is painless because it is non-invasive. Mammography and radiation are eliminated. Screenings are safe, pain-free and private. They have also deployed an innovative pay-per-use model — instead of targeting direct sales — which can empower doctors in every corner of the country to start screening women for breast cancer at the earliest. The device is US FDA cleared and CE marked. It is operable by any community health worker. And it costs only around `65 per scan.

And mind you, UE Life Sciences is making ‘profit’, besides serving a bigger ‘purpose’ of doing good for society.

Another winner is young Rahul Rastogi, who created a portable matchbox-sized 12-lead ECG machine. The cost is just `5 per ECG test. This high-tech innovative solution for personal cardiac care — the ‘Sanket’ electrocardiogram (ECG) device — has captured the imagination of society. Tata Trusts funded him to build an advanced version of his device, which became a 12-lead device, and not just the original six-lead one, for which we awarded the prize. Most recently, they partnered with the Tata Trusts to deploy 45 devices in clinics in Tripura for quick screening and diagnosis of cardiac diseases. In the remote and hilly state of Tripura, regular screening would have been virtually impossible.

There are examples galore to show that India’s youth power is all set to bring societal transformation through innovation. Here is an example of young undergraduate students.

The Hult Prize India Chapter 2016 threw down the challenge of coming up with strong, scalable social enterprises to double the income of millions residing in crowded urban spaces.

Team Aces, comprising four final-year students at IIT Kharagpur, came up with an idea for employment of urban slum-dwellers during a canteen conversation that was quite counter-intuitive to the prevailing fear about technology-led jobless growth due to robotics and artificial intelligence (AI).

AI involves machines learning technology, and that in turn needs initial training data to be provided manually. This data requires millions of inputs from people before machines can interpret and learn it.

Team Aces decided to crowdsource people who had time on their hands or a job without a set nine-to-five schedule. They could be maids, drivers or shopkeepers, who can do this inputting in their free time.

The team was ranked first in the India Chapter of the Hult Prize Challenge. The initiative was evoked by the desire to do something socially while believing in creating a sustainable social enterprise without the need for any grants.

The main challenge is to ensure that such ideas are nurtured and supported through CSR or other funds, just as the Tata Trusts did for Rastogi’s portable ECG device. And that is exactly the initiative taken by Pune International Centre (PIC). I happen to be its president while Dr Vijay Kelkar is vice-president. It was Dr Kelkar’s idea to start the first ever National Conference on Social Innovation (NCSI). It was structured around the enabling themes of Sahajta, Samvedna, Saralta, and Sampreshan. The NCSI covers urban, rural and tribal social innovations.

The NCSI has an action-oriented approach. It has created a platform for social innovators to present their innovations and the results to the CSR cells of various investors, academia and media. Social innovators are now able to find media outreach, support and resources.

Finally, I must emphasise that the government has a big role to play in scaling social (or socially relevant) innovations. What can it do? Let me elaborate just one aspect.

Innovations are products of creative interaction of supply and demand. Besides supply-side initiatives, we need aggressive demand-side initiatives — and public procurement is an obvious choice. With large procurement budgets, the government can not only be the biggest, but also the most influential and demanding customer of these innovations.

The government approach could be based on three pillars. First, the government could act as the ‘first buyer’ and an ‘early user’ for small, innovative firms and manage the consequent risk, thus providing the initial revenue and customer feedback needed to survive and refine the products and services so that they can later compete effectively in the global marketplace.

Second, the government can set up regulations that can successfully drive innovation either indirectly through altering market structure and affecting the funds available for investment, or directly through boosting or limiting demand for particular products and services.

Third, the government can set standards that can create market power by creating demand for innovation. Agreed upon standards will ensure that the risk taken by both early adopters and innovators is lower, thus increasing investment in innovation.

People call me ‘dangerously optimistic’. Why am I so optimistic? Because I have no doubt that social innovation in India is safe in the hands of the young.

Let me explain. I co-chair the Maharashtra State Innovation Society. We had a Maharashtra State Start-ups Week recently. Start-up after start-up was asking one question: What can I do for society?

I met young Akshay Saini, who is bothered by the fact that people don’t segregate waste. So his start-up, Binner, has a mobile app for waste management that rewards! He expects the app will make Indians habitually dispose of and segregate waste at source by rewarding them, along with a sustainable revenue model.

Then there was young Maitri, a differently abled girl who has a start-up which is creating technologies to help other differently abled! I continually get both touched and reassured every day, when I meet such young people.

I am convinced that compassion, innovation and passion in this young India is going to drive our rapid yet sustainable social transformation, if our society only trusts them and invests in them.

I take a broad working definition of social innovation. To me, it is any innovation that does good for all members of society, not just a privileged few. It could be a technological innovation, business model innovation, system delivery innovation, work flow innovation, process innovation or their combination. Policy innovation plays a big role in making social innovation scalable and sustainable.

But how do we ensure success in innovation in general and social innovation in particular? My K.R. Narayanan Memorial Oration was titled 'Dismantling Inequalities by ASSURED Inclusive Innovation'.

I defined an ASSURED framework as one where success in innovation is assured. ASSURED stands for: A (Affordable), S (Scalable), S (Sustainable), U (Universal), R (Rapid), E (Excellent), D (Distinctive).

A (Affordability) is required to create access of a technology or a service for everyone across the economic pyramid, especially at the bottom.

S (Scalability) is required to make real impact by reaching out to every individual in society, not just a select few.

S (Sustainability) is required in many contexts, environmental, economic and societal.

U (Universal) implies user-friendliness, so the innovation can be used irrespective of the skill levels of an individual.

R (Rapid) refers to speed. Rapid inclusive growth is the need of the hour. It cannot be achieved without the speed of our action matching the speed of our innovative thoughts!

E (Excellence) in technology, product quality, and service quality is required, not just for the elite few but for everyone in society, since the rising aspirations of resource-poor people also need to be fulfilled.

D (Distinctive) innovation is required because there is no point in creating ‘me too’ products and services.

ASSURED can be a ‘one-word innovation policy statement’ for India, helping it achieve accelerated inclusive growth.

To ensure that each element of the ASSURED framework is successfully met, CSR can play a big role and this is being widely recognised now.

Coincidentally, the July 2018 issue of Civil Society magazine has a cover story on the role of CSR in bringing about social change.

It details how Piramal Foundation’s CSR efforts in Araku Valley of Andhra Pradesh have brought maternal mortality down to zero in some remote tribal villages. This was done by using technology, trained human resource and the government’s own infrastructure.

It is a good model which should be replicated elsewhere in India to enable access to healthcare to unserved communities in far-flung locations. This is a brilliant example of how CSR funds can be innovatively used for social transformation. And, indeed, this is the sentiment that Ratan Tata expressed in his recent interview about the future of CSR, when he said, “CSR could become an avenue for innovative thinking about how you can improve the quality of life of the people of India.” 

Dr R.A. Mashelkar, FRS, is National Research Professor