Indian tales of inclusive business models


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Todays buzz word is "Inclusive" be it:-
-Inclusive growth for India
-Financial Inclusion etc.

In similar manner today having inclusive business model is need.This HBR article shares some of the existing inclusive models.

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Indian tales of inclusive business models

  1. 1. Indian Tales of Inclusive Business Models3:00PM,Wednesday,January5,2011by Navi Radjou, Jaideep Prabhu, Prasad Kaipa, Simone Ahujablogs.hbr.orgWe just spent the last few weeks criss-crossing India to discover how private sector companies are striving tosupport Indias quest for "inclusive growth."Inclusive growth has become the economic development mantra for both Indian politicians and CEOs in recentmonths. Prime Minister Manmohan Singh is championing this concept to ensure that even as the red-hot Indianeconomy keeps growing at 9%, this growth is equitable so that the 300 million Indians living with less than $1 aday are not left out of the economic boom. He has challenged Indian companies to come up with inclusivebusiness models that deliver more value at less cost for more citizens — be it in agriculture, healthcare,education, energy, or financial services.Indian companies have traditionally contributed to inclusive growth primarily through philanthropic activities orCSR (corporate social responsibility) projects. While these non-profit projects have a modest societal impact,they were devoid of for-profit business models — and financial motivation — needed to scale them up.Today, however, that old model is being retired. Many Indian firms as well Indian subsidiaries of MNCs are nowadopting new business models that can deliver affordable housing, healthcare, education, and financial servicesto those living in the middle and bottom of the pyramid.We visited major Indian metros to interact with companies that are pioneering these inclusive business models.At the 2010 India Economic Summit organized by the World Economic Forum in New Delhi we facilitated aworkshop entitled "Innovating More with Less for More" where C-level execs shared best practices which theircompanies have adopted to enable inclusive growth in India. Ellen Kullman, CEO of DuPont, talked about theinnovative public-private partnerships DuPonts India unit has forged with various state governments to increasethe productivity and profitability of farmers and improve food availability by making resilient seeds available ataffordable prices.Kullman explained that DuPonts inclusive business models are not blue-sky stuff conjured up in her firms R&Dlabs or in the boardroom, but rather based on understanding the actual needs of bottom-of-pyramid users.Recently, for instance, DuPont Indias entire Indian leadership completed an immersion program in hinterlandIndia with guidance from MART, a rural marketing consultancy. In the process, these senior execs developedtheir insights into the needs and wants of rural consumers through interaction, discussion and research. Theoutput was several big commercially viable product ideas backed by inclusive business models — which DuPontIndia will be developing soon with the active involvement of rural communities.We then headed to Mumbai, Indias financial capital, where we participated in a panel discussion hosted by AsiaSociety entitled "INDOvations: Driving Global Innovations from Emerging Markets."Indovation designates theunique process by which innovations are developed in India to serve a large number of people affordably andsustainably in response to conditions of scarcity and diversity.
  2. 2. Our fellow panelist, Geetu Verma, Exec Director of Innovation at PepsiCo India explained how her company has devised inclusive business models to help scale up such Indovations. For instance, PepsiCo India and the Punjab Agricultural University have co-developed a tractor-driven machine to systematically implement direct seeding of rice (DSR), an eco-friendly technique that can reduce water use in rice paddies by 30% and cut carbon emissions by 70%. DSR is a boon for Indian farmers who are reeling under the effects of water scarcity. DSRs initial success has led PepsiCo to team up with the Indian Agricultural Research Institute to deploy DSR nationwide. Verma pointed out that PepsiCos partnerships with research institutions, state governments, NGOs, and local communities help make the companys inclusive business models both scalable and sustainable. Of course, social entrepreneurs have pioneered many of the inclusive business models that large multinationals are now tapping into — and in Hyderabad, we presented at a boot camp (iDiya) for some of those entrepreneurs at the Indian School of Business. Three innovative projects —MASARD (sanitary napkins production by/for poor women), Akshaya Kalpa (integrated organic dairy venture), and Aakar Asha (center for enabling physically disabled) — got the top three awards for their inclusive business models.These and the seven other projects in the top ten will be getting mentoring and help connecting with funders to take their plans forward. We also saw evidence that inclusive business models are making inroads in one of Indias biggest and best- known industries, IT services. In Chennai, the capital of the Tamil Nadu state and a city that is emerging as a big IT hub, we participated in a seminar co-hosted by Cambridge University and the Confederation of Indian Industry (CII) on how to scale up the Indian innovation ecosystem so that entrepreneurs, VC firms, universities, and corporations can systematically co-create inclusive business models. One promising example was pointed out to us by Sandhya Shekar, CEO, IIT Madras Research Park, who discussed how they have successfully incubated profitable social enterprises such as DesiCrew, which employs many rural women as Business Process Outsourcing (BPO) workers. At the end of this long trip across India, we were inspired by the inclusive business models pioneered by private sector companies — small and large, domestic and multinational — to deliver more value at less cost for more people. We will be writing more about these pioneers in our blog posts throughout 2011. A core theme of the World Economic Forums 2011 Annual Meeting is "inclusive growth." We hope the CEOs gathering in the chilly Davos in late January may find the tales of inclusive business models pioneered in India not only heart-warming but also applicable in their own markets. To read this article: About Authors: Dr. Jaideep Prabhu is the Jawaharlal Nehru Professor of Indian Business and Enterprise. Navi Radjou is Dr. Prasad KaipaExecutive Director of the is a CEO Coach in SiliconCentre for India & Global Valley and a senior researchBusiness (CIGB) at Judge fellow at the Centre forBusiness School at the Leadership, Innovation, andUniversity of Cambridge. Change at the Indian School of Dr. Simone Ahuja is Business. the CEO and founder of Blood Orange Media.