We just sponsored Sociopreneurship 2010, an event that brought together social investors, industry experts and the media for panel discussions and also recognised and showcased social innovations and entrepreneurs. This event is timely in a country like India and is a mark of the shift in thinking away from non-profit models to market based solutions that can operate at large scale and therefore create social value more systemically.
When we begin to talk specifically about ‘social’ entrepreneurship though, it really begs the question: What does it mean to create social value? I think we all have a notion of what it means but when you try to define it and measure it, it gets quite murky and difficult. One fundamental implicit assumption of social value is social equity or equality of opportunity and access. In this sense we commonly think of social enterprise as an organization that addresses a low income market with a product that can raise standard of living, either by providing greater opportunity or convenience. However, as I have discovered in the past five years, simply product and market are not sufficient.
One very eye opening fact that is emerging time and again in our research is that rural microentrepreneurs access very small markets. Our first survey found that about three quarters do not buy or sell beyond a 5 km radius and only 2% venture beyond 20 km (the ‘middle men’?).
Here’s a view from Google Earth of a region of rural Tamil Nadu that is 5 km across. It has a cluster of about 12 villages with a population roughly between 4 and 5,000, typical for most of India. That’s a really small market to be limited to.
CK Prahalad’s book The Fortune at the Bottom of the Pyramid has firmly established our visual impression of how incomes are distributed as a pyramid. A strong, solid structure with the poorest at the bottom that slowly tapers, kind of holding up the apex. In reality it looks NOTHING like a pyramid. Here’s a 3D visualization of what it looks like based on real income distributions. Of course, if I had a lot of time on my hands I’d figure out how to plot it in 3D a lot better, maybe starting with a square shape rather than a circle so it compares better to a pyramid. But I don’t. You get the picture though. (To get more of a sense for what income distributions are like check out my earlier posts Who Cares about the Average Income and Income Distributions around the World).
Rather than put my take on the different impressions and associations you get from these pictures, I’m really curious to hear yours. What are the associations you get from this over the pyramid? I think that we need a different term to replace the ubiquitously used ‘Bottom of the Pyramid’.
Very excited that the film Shakti Pirakkudhu (Shakti Rising) that has been in the works for three years now is finally done - this week! The goal of this film is to seed different thinking among the rural poor and raise their aspirations. We have a bunch of by invitation pre-release screenings planned around the country (India) in October and will post a schedule here soon. In the United States, the film will have its premier screening at SALTAF (South Asian Theater and Literary Arts Festival) on Nov 13 at the Smithsonian in Washington, DC.
Synopsis Sundari is a young mother of two in a small village in South India. She has an opportunity to get a microfinance loan and wants to use it to start a business. Her husband is scornful of her ambitions - she has never been more than a housewife. As she struggles to find her feet in a trade, the village erupts into a flurry of politics with the arrival of a woman from the city looking to start a garment factory in the area. This is a story of a village woman trying to define what success means to her in the context of an expanding world view, and of a family struggling to find their equation at the crossroads of what is and what could be.
It’s been a bit of a busy month for me and I haven’t had time to post. After years now of reading, surveying, observing and thinking, we (meaning Madura) are finally putting together the pieces of our socioeconomic transformation strategy. We’re taking quite a leap from the run-of-the-mill microfinance, so we’re operating like a start-up again, which is fun. But, with profits to take some chances with, so that’s even more fun. We’re looking at a massive, for profit experiment in reengineering the socioeconomic system dynamics of our members - about half a million poor women in rural Tamil Nadu, moving rapidly to a million. This involves putting in place a large scale smart phone driven data collection system, a mobile phone rollout for our members that will support a host of applications in the future, and development of a cool cutting edge network analysis platform that will allow us to track the evolution of the structure and dynamics of our member network so that we can nudge it towards a more productive trajectory of evolution. So here’s the story, (a bit of a synthesis of many of my previous posts).
I’m betting heavily on the value of information. From everything I know in theory and intuitively, without timely access to information, not much can get done, and certainly very little can get done well. This is true for societal progress in general and for organizations. Without information there would be a lot of resources wasted reinventing the wheel and we would lose the benefit of access to the collective ideas around us. Still, this value seems sort of intangible. How do you put a number on it? Some folks in Boston from MIT and BU have tried to do just that.
In the five years I’ve now spent working in rural Tamil Nadu, I have been frequently surprised by the level of creativity that surfaces at various events that we hold. On the other hand real progress and innovation is hard to come by. Somehow village societies don’t make the leap. My father believed that this was a consequence of attitude – the attitude of waiting around for someone from somewhere to come and do it for them, ‘it’ being everything really. He blamed it on the government programs of handing out free stuff.
As a child my father spent all his holidays in the village, shuttling between Poolankurichi, Nerkuppai and Thekkur by bullock cart. He was also the first of his family to travel to the United States for graduate study. He was fascinated with the story of the pilgrims and how they built their lives from scratch into the America that he went to. In the last ten years of his life when he took on his work in microfinance, a big part of his goal was to change mindset. Several times I accompanied him to villages where he would tell the villagers about the pilgrims and how they got together and took responsibility for their own progress. In 2002 he started a project he called ‘Village Mission’, the idea being to galvanise villages to take responsibility for their own progress by providing seed capital for services (a small clinic, vocational training, school facilities for instance) that the village would get together to build and manage.
I inherited these projects shortly after his illness in 2003. I spent hours in the two villages where the pilot was in progress talking with the village head and various key people. Yet they always fell back on the refrain of ‘Why don’t you do it for us (build it, run it, provide it all for free). Our people will worship you as a God.’ Stupidly we even gave in to some of their requests and built them some buildings (for free) but never got them to take ownership. As hard as we tried, we couldn’t get them excited about taking any stake in it – in running it or taking any responsibility for it, even though they all agreed that all of these were very necessary and useful for the village and had come up with their wish list themselves. Finally we quit. I’ve thought a lot since why we failed so miserably. I'm not convinced it has to do entirely with the government. Are they really just waiting around?
Recently I was sitting with my kids as they watched TV and it struck me that the ethos reflected in the shows is probably at the root of the difference between the American pilgrims and these village folk. Embedded in so many American kids’ shows is a theme (or even meme) of ‘Get up, get to it. You can do it.’ Take Bob the Builder, for example. It’s classic Americana. ‘Can we build it? Yes we can! Can we fix it? Yes we can!.’ Its theme is so much a part of American culture that even Obama used it for his election campaign.
Contrast that to our Amar Chitra Katha comics, now all made into animated TV cartoons. They run the frequent theme ‘For your sacrifice and penance Lord XYZ will appear before you and grant you a boon.’ This is not just TV but deeply ingrained in the psyche.
At the extremes our village folk take vows of hardship and expend tremendous energy in the desperate hope that their wish will be granted, going so far as to roll in the hot sun for hours or put hooks in their backs and drag stuff around . In a more general context, I realize that the village folk are not lazy and just waiting around. Rather I’m betting that I might have had better luck getting the village to take on some immense physical hardship as a method for bringing progress to the village rather than trying to get them to get to it and build it themselves.
Our villages need Bob the Builder! (Happy to see its now on TV here in Hindi!)
