<div><em><strong>Pranav Sharma</strong> analyses why most of us consider businesses as unsympathetic to social development and the way forward</em><br><br>In today’s pro- business scenario that seems to cover a spectrum of capacities, a question looms whether this development in the business sector only benefitting the rich and if the poor are still cordoned off? There’s an incoherent belief that the advent of business has posed various social challenges. Poverty, malnourishment, lack of sanitation and unhealthy conditions are to name a few. </div><div> </div><div>In this fractured and impatient society we see NGOs, government’s initiatives and philanthropy as the only ray of hope, whereas the business world is seen as a bearer of these social issues. But the question is why most of us consider businesses as unsympathetic? In order to address this notion, we’ll have to step back and ponder radically.</div><div> </div><div>While we tend to seek mobilization, the situation remains icky and impaired. If you ask why, the only possible reason can be the lack of resources. We don’t have sufficient resources to deal with these problems. Using the current model, we don’t have enough tax revenues and philanthropic donations. It’s time we confront that the scarcity of resources is only aggrandising in the advanced world. </div><div> </div><div>I think many have seen business as the problem or at least one of the problems in the many of the social challenges we face .Now this a low point for Business as it is not seen as a solution, now it’s been seen as a problem by most of the people and rightly so since there have been lots of bad actors out there who have done the wrong things, that have made the problem worst and thus this perspective is perhaps justified. But how do we tend to see solution to these social problems, these many issues we face in the society? Well we tend to see the solutions in forms of NGOs , in terms of Government , in terms of philanthropy. </div><div> </div><div>There has been a tremendous rise in this unique form of entity called NGOs , This is a unique form of organization we have seen growing , enormous talent , enormous energy , enormous innovation now is been mobilized through this structure to try to deal with all of these challenges and many of us are deeply involved in that . We have been aware of these problems from decades, we have decades of experience with the NGOs and the government entities but the awkward reality is that we are not making fast enough progress , we are not winning . These problems still seem very daunting , very impracticable and any solution we are achieving are small solutions we are making incremental progress What’s the fundamental Problem we have in dealing with these problems?</div><div> </div><div>If we cut of all the complexity away we have the problem of SCALE. We can’t Scale , We can make progress , we can show benefits , we can show results, we can make things better, we are helping but we cant scale . We cant make large scale impact. Why is that? because we don’t have the resources , that’s clear now , and that’s clear now that hasn’t been since decades, we don’t have enough resources and money to deal with these problems .Using the current model , we don’t have enough tax revenue, we don’t have enough philanthropic donations to deal with these problems .we got to confront the realty now. and the scarcity of the resources for dealing with these problems is only growing certainly in the advanced world. So if its Fundamentally a resource problem then where are the resources in the society? How are these resources created that we need to deal with these societal challenges? well there I think the answer is clear , they are in business, Business creates wealth when it needs by way of profit.</div><div> </div><div> Its meeting needs at a profit which leads to taxes which leads to incomes , which leads to charitable donations that’s where the resources come from .Only business can create resources , all the other institutions can utilize them to do important work but only business can create them . The resources are overwhelmingly generated by business. The question now is that how we Tap into this? Business generates resources when it makes profits, that profit is the small difference between the cost and the price , but that profit is the magic . That profit allows the whatever solution we have created to be infinitely scalable. The solution becomes self sustainable, Now what’s this got to do with the social problems?. One line of the thinking is that lets take this profit and redeploy it into social problems .Business should give more towards the social problems, business should be more responsible that’s been the path which we have been on for so long but this path is not leading us to where we need to go.</div><div> </div><div>So how can the situation be overhauled? For a country like India with a population of over 1.2 billion people, the need to change from business strategies to “Responsible business strategies” to tackle with issues such as health, nutrition, education, water scarcity and climate change, is mandatory.</div><div> </div><div>We have seen companies like TATA Group which are actively working for social causes. Over the years, its endeavors have encompassed provisions in healthcare services, drinking water, rainwater harvesting, tribal development, relief and rehabilitation, income and employment generation, women’s health, education, awareness programs and patronage to sports and cultural activities. Indian Tobacco Company’s initiative e- Chaupal has won immense appreciation. Their model has been designed to specifically tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others. We also see companies like CISCO that are training 4 million people in IT Skills to be responsible and help expand the opportunity to disseminate IT Technology and grow the whole business to impact and address social problems. </div><div> </div><div>A major part of the revenue is generated through business. Now if they have a better working atmosphere, it would help them raise profits, which in turn would raise the social standards of the country. The conventional wisdom in economics and the view in the business has historically been that actually there’s a trade of between social performance and economical performance , Conventional wisdom has been that business makes profit by causing a social problem . Let’s take for example- it’s too expensive to have a safe working environment, so a lot of companies resist the effort. But if we look at it the other way round, a better working atmosphere would retain better employees who would deploy all their potential. Thus, the company will grow and so will its profit. Whereas dealing with accidental situations and regular health issues appear too costly to be borne. Businesses do not earn profits by creating social problems, not in any fundamental sense, the better we try to understand, we realize that businesses earn profits by solving them. </div><div> </div><div>This new thinking on the interface between the business and social problems incites a fundamental and deep synergy that pays off in the long run. Most of the companies today understand this dire need and hence are moving towards effective work conditions. Taking this recourse and tapping into organisational capacity is sure to fetch positive outcomes in the times to come.</div><div> </div><div>It’s a higher kind of capitalism that would ultimately meet the important needs. Shared value occurs only when social value and economic value are created simultaneously. It’s like finding an opportunity that can unleash the greatest possibility of addressing social problems. We can address shared values at multiple levels, its real and its happening but in order to get this solution working businesses will have to introspect on how they perceive themselves. Instead of being trapped in the conventional wisdom companies should embrace an ideal approach that can effectively create better circumstances with NGOs and government working part in partnership with business. The government also has to find ways to enable shared values in the businesses rather than projecting itself as a single player. As it’s said, change in perspective has the power to change the world!</div><div> </div><div> </div><div><em>Pranav Sharma is founder of AUGMEN which primarily focuses on Development Sector Consulting and CSR Consultancy and Advisory </em></div><div> </div>
