Is India Really a Hotbed for Social Enterprise?

I'm writing a few posts a month for Good Magazine. Here's the first!

If you know anything at all about social enterprise, you are probably familiar with the fact that many of the case studies cited as successful are Indian in origin. Case in point: Aravind Eyecare, Jaipur Rugs, Barefoot College, d.Light. It makes you wonder: Is India better at producing social entrepreneurs than other countries? Is there something in the water? And if India really has cornered the social enterprise market, how did they do it?

First, let’s look at what we know. India is massive. It’s bursting at the seams with people, and because one out of every six people on the planet is an Indian, we are statistically more likely to stumble upon Indians anywhere—and some of those people are bound to be social entrepreneurs, right? Of course, a big pile of people does not explain why social enterprises often thrive in India, and the policy environment certainly doesn’t help: There are no freebies for social enterprise, no special legal structures (like the L3C here in the United States or the CiC in the U.K.), and few policies that help enterprises get funding. In fact, some might say that Indian social enterprises have succeeded in spite of policy, not because of it.

What about funding? Most Indian social entrepreneurs would tell you that they have just as much trouble as the next guy. There are only a handful of “social” or “social/commercial” funds in India, and while there is a frenzy of interest in India from foreign investors, many of them ride on the coattails of domestic funds, investing only after a trusted Indian social investor has made the first move.

So, what makes India different?

India has had a long, rich love affair with nonprofit organizations. A recent survey commissioned by the Indian government found that there is one non-governmental organization for every 400 people—which means there are about 3.3 million NGOs. Regardless of how great each NGO's impact is, the sheer number of them is symbolic of a culture that favors trying to help those in need. However, many have seen that these NGOs are not always accountable, transparent, or sustainable. Stemming from this tryst with NGOs is a graduation to sustainable social enterprise.

Second, with over 40 percent of people on the subcontinent living on less than U.S. $1.25 a day, there is plenty of need for social enterprise. With such a large population in need, there’s plenty of opportunity to test things out. Because of a lack of regulation and oversight, it is possible to get in there, run pilots, and figure out what works.

Third, the currency of language cannot be underestimated. One of India’s national languages is English, and many people, rich and poor, speak it. Even if social entrepreneurs in Romania or Ecuador or Côte d’Ivoire have great ideas, they may be held back in their ability to spread those ideas, enter international business competitions, or get funding from English-speaking Western countries.

Fourth, never underestimate the power of the Indian family. Indian families are tight, complex webs of people who you know and love, and people who you don’t know, but who you call “cousin” and “uncle” even if they have absolutely no relation to you. These networks—close and extended—translate into resources for social entrepreneurs. They are the building blocks of most start-up businesses, and these enable enterprises that would not otherwise have a chance, to get off the ground.

Lastly, and perhaps most important, there is a certain ethos in India which makes it possible for social enterprise to thrive. You can’t manufacture this attitude; it is something that only comes from living and working in India. This attitude, a mix of confidence, perseverance, and “can’t-touch-this,” known as jugaad, is an Indian way of getting things done using any means, against the odds. This ethos gets social entrepreneurs, once they put their minds to something, to figure out how to make broken systems work, to close gaps in service delivery, and to change the status quo.

So, combine a whole bunch of people who have an unstoppable attitude, an incredible combination of personal resources, a population in need, and a propensity towards helping others…and what do you get? A hotbed for social enterprise. What do you think? Are you drinking the KoolAid?

Image (CC) by Flickr user Meanest Indian

India Journal: Employership vs Entrepreneurship

(Left) A future employer?

Read below for my latest article for the Wall Street Journal.

With more than half a billion people under the age of 25, India is sitting atop a potential powerhouse of intellectual and physical energy. But, India’s demographic dividend is only a ‘potential’ positive unless India’s social entrepreneurs become actors in this transition.

A look at the numbers released in the recently published India Labour Report 2009 reveals that the population will grow to 1.4 billion by 2026, and 83% of this increase will be in the 15-59 age group—a huge lump of productive labor. Much has been said about India’s need to educate its youth in order to capitalize on this demographic window of opportunity. And, there is no denying the importance of education. But, there is also a dire need for job creation and job training. By 2025, India will house a whopping 25% of the world’s total workforce, with the projected number of new entrants into the workforce each year at 12.8 million. Where are these jobs going to come from?

The India Labour Report cites the need for a smooth legal and regulatory ecosystem, as well as employability frameworks and employment ecosystems in order to create a more enabling environment for job creation. I would argue that we also need to encourage social entrepreneurs to take on the challenge—by becoming employers themselves.

Social entrepreneurs are known for the creativity and innovation they bring to bear on the gaps in development. Whether tackling water or education, energy or sanitation, social entrepreneurs develop inventive ways to bring new solutions to social challenges. But, in all this creativity, they may be missing one of the larger issues at hand: “employership,” or, the generation of jobs where none existed before.

Lest you confuse employership with entrepreneurship, allow me to elaborate. ‘Entrepreneurship’ is a loaded word. There is pressure to launch a game-changing idea—or nothing at all. It asks for confidence and considerable chutzpah. It takes passion and an affinity for risk. To be an entrepreneur is to take the weight of the world on one’s shoulders in order to create something that no one has ever done before. It’s not something taken lightly, nor is it something many Indian families encourage.

Now, consider “employership.” The task of creating 100 jobs is challenging, but beautifully concrete. The framework is Problem/Solution, rather than Blue-Sky thinking. It requires flipping the idea of a target market on its head: it’s not about the consumer (yet); in the initial stages, it is about determining who to employ.

Several social entrepreneurs have founded companies that use already existing business models, but employ a specific segment of the labor pool. Dhruv Lakra started a courier company, Mirakle Couriers , which employs deaf adults, a group that receives concessions on Mumbai train transport. Revathi Roy is the Managing Director of ForShe , an all-women-driven taxi service, preferred by many women traveling alone. Vivek Agrawal is the CEO of Kanak Resources Management, a company that employs ragpickers—who have plenty of experience—to assist in municipal waste collection. In the case of all three enterprises, very few, if any, of the current employees were previously employed. But, each company’s labor pool also happens to offer a competitive advantage.

Perhaps we should encourage India’s budding social entrepreneurs to be less creative. Less innovative. Because employership does not require a game-changing idea, or a system-fix—just basic businesses that create jobs, raise standards of living, and create a virtuous cycle of advancement. If 1,000 people in each of 20 states built businesses that employed just 50 people, we’d see 1 million new jobs created—a decent dent in the projected 12.8 million demand. And, no doubt, by creating employment some of the problems social entrepreneurs are trying so desperately to solve may go away without direct intervention.

India has the chance to use its coming demographic transition as a catapult into the future, building its economy, its workforce, and its global brand। But, a working-age population won’t provide value on its own. By challenging India’s social entrepreneurs to become part of the solution, India will reap the benefits of this new wave of human capital.

India Chief Mentor: Where are the Entrepreneurs in Yoga and Ayurveda?

My latest piece, published in the Wall Street Journal. Read below for the full text.

Ever since the microfinance investment story began in India, investors have been scouting the “next big ‘social’ thing.” One category has been overlooked—affordable wellness. India has cultural assets—yoga and ayurveda—that, if harnessed effectively, could create tremendous value for communities and the economy.

But without social entrepreneurs and investors willing to take on the work of professionalizing these assets, we may never know their true worth.

Case in point: yoga. Pick any major city in the world—London, Paris, New York, San Francisco, Singapore, Bangkok—and you will find a great studio and a menu of yoga options. Try to find the same thing in Delhi, Mumbai or Calcutta, and you’ll have a difficult time.

With the exception of a bright spot or two in Mysore, Pune, and Rishikesh, practicing yoga in its birthplace is either exceedingly dull or completely bastardized (“power yoga” does not a yogi make). Yes, there are plenty of spots for “yogations” (yoga vacations) but they cater almost entirely to tourists and are often taught by tourists. Why come to India to be taught by a German instructor? Where are the great Indian teachers and the great Indian studios?

Having practiced yoga in India on and off for the last few years, I have found a handful of good teachers. But I’m told that the job usually doesn’t pay well and therefore is not a top choice for recent grads. Quite a perverse system of incentives, though: We encourage India’s youth to pursue monotonous low-paying work in call centers when they could study and/or promote some of India’s finest assets.

These assets — yoga and ayurveda — are not yet fully valued in the market. If they were, it might be a more sustainable approach to improving the long-term wellness of India’s middle-income population. (It should be noted that the “unaffordable wellness” market has plenty of capital behind it and a growing number of people who can and will pay for it.)

Many Indians haven’t adopted India’s healing sciences as part of their lifestyles—they are a bit esoteric, they say. With the exception of the buyers of the odd Bollywood starlet yoga DVD, practicing yoga is largely reserved for sweet old aunts and pot-bellied uncles. And the “practice” here is generally limited to pranayama (breathing) in the wee hours of the morning, often with the guidance of self-appointed guru Baba Ramdev on the TV in the living room.

As for ayurveda, a medical science that originated 5,000 years ago, the natural cosmetics industry in India is big business; 18% of all cosmetics in India are “ayurvedic.” But affordable preventative medicine through ayurveda still has untapped potential.

In the West, entrepreneurs, athletes, and the media have built an empire around yoga. The 2008 “Yoga in America” study, released by Yoga Journal, a magazine devoted to the practice, showed that yoga is a US$5.7 billion a year industry.

So, why don’t we see more enterprise activity in this area? Part of the barrier is that these assets are so integral to Indian life as aspects of personal spirituality and/or community heritage that professionalizing them is not seen as an opportunity. Patent offices in the U.S. and Europe have run into trouble quite a few times when they were found to be patenting yoga poses and formulas that use natural plant products as if they were new inventions.

It’s something that India never thought to do – until now. The Council for Scientific and Industrial Research has prepared patent formats for nearly 900 yoga asanas to prevent European and American companies from claiming them as their own, according to this article in the Hindustan Times.

Practicing yoga and encouraging less pill-popping and more naturopathy are two affordable ways to maintain a healthy lifestyle. There’s no doubt about the need: India has the second highest incidence of diabetes in the world and over 20% of urban Indians are obese, according to the National Family Health Survey. As India’s middle class grows, their waistlines will no doubt expand, too.

There must be a way to provide more value to communities, bringing a social return, while also making a financial return by injecting more energy, clinical R&D, and capital into these assets. If an entrepreneur took on the job of spreading yoga in a way that retained allegiance to the philosophy and enabled practitioners to enjoy its health benefits, perhaps we’d see fewer patients end up in hospitals in the long run.

Imagine if “school entrepreneurs”— the pioneers who run affordable private schools — started incorporating yoga into their programming. Or, what if the Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy worked with a private company to incorporate 20 minutes of yoga in all public school curricula? Or, what if companies offered a mid-day yoga break?

Imagine the jobs that could be created through the spread of yoga—yoga instructors, yoga camps, the production of yoga products. It’s bound to be healthier and more interesting than doing data entry! It all seems like an investment well-spent.

Social entrepreneurs are starting to see the potential. Swas Healthcare, a chain of naturopathy clinics and hospitals is expanding in cities across Gujarat. The company provides treatments for chronic diseases and at an all inclusive price as low as 300 rupees per day, making it affordable to many. Last year, Aavishkaar Micro Venture Fund invested in it. Another affordable hospital focused on providing access to preventative healthcare to rural markets is the hospital network Vaatsalya. SEED Fund and Aavishkaar are both investors.

No word yet on any yogapreneurs dedicated to bringing wellness to the masses। Until then, we will likely continue to see the West (and Mr. Ramdev) take on first-mover status when it comes to adopting and transforming some of India’s best exports.

Stuck in her Ways

The Indian mindset often seems hard to shift. Mind set. Mindstuck. We’ve escaped for the weekend to a cantonment in the Himalayas of Himachal Pradesh. Whereas Delhi is over 100 degrees right now, and Mumbai is 90 with 74% humidity, the little village of Kasauli requires a light shawl in the morning, and is sunny and a beautiful 85 in the afternoon.

When we checked into our hotel, it was just after lunch. We asked the receptionist where we could go for a hike. “Oh, you can’t trek now,” he said with certainty. “It is too sunny.” This was the second time we’d been told this. The driver that brought us to the hotel also said, “It is too bright now. You can walk this evening.”

The weather was perfect. Not a cloud in the sky. Bright and clear. All that was needed was a slick of sunblock. But, someone once told these guys that they shouldn’t go out during the day. It will make you dark. You should take rest. And they listened, and now, they pass it on.

There are so many things like this here: you shouldn’t drink hot drinks then cold; if you’re sick, it’s usually the weather; if you have a cold, you should not work; it’s Western food (not oily Indian food) that’s causing Indians to have health problems, etc.

I admit, you hear these things often enough and you start to believe it. Even if it holds no water. Which is why some parts of India are really stuck. You hear something and pass it on, like a folktale, without considering an alternative. “The poor are ignorant.” “Orissa is a backwards state.” “Delhi is not safe for women.”

The typical response to India's challenges goes thus: “Adjust, adjust. It is like that only.” It indicates an acceptance of the ways things are, because that easy attitude makes it easier to go on, and get past the country's rough edges. But, a people desirous of change and advancement cannot afford to believe that it is like that only.

Robots, Pipes, Stampedes, Oh My!

Thirty two people from around the world have gathered in Bellagio to talk about the future. We are part of the Rockefeller Foundation’s “searchlight function,” an effort by the organization to work with teams around the world to uncover new and future developments that will affect the poor. In addition to about 10 sets of researchers, there are an additional 6-7 guests who have been seeded among us to add complexity and alternative perspectives to the conversation. Which is why, at breakfast yesterday, I found myself learning about the way robots can be used to find water leaks inside pipes and detect bank robberies before they happen.

Let me explain. Old leaking and cracked pipes are a big issue in many countries—developed and developing. The last month alone in Mumbai, the media has reported at least 5 major pipe bursts due to festering leaks. Smart robots can actually prevent this from happening by finding current or potential weak spots and patching them up.

As Andre-the-robot-man explained to me, the robots are programmed to sense dissonance in patterns. In the case of a pipe, they can sense when there is a break in the surface because it is different from the other parts of the pipe. The same kind of technology can also be used to identify when a bank is being robbed or when a crowd is getting out of control. The system maps the usual behavior, and when it notices a break in the pattern, it can alert the main system. Think about how useful this would be for crowd situations in India, where there are stampedes several times a year that inevitably cause unnecessary deaths of dozens, and sometimes hundreds of people. The technology developed by Andre’s company can actually detect a simmering situation about 4-6 minutes before it explodes—giving the powers that be time to react and prevent it.

At Bellagio, we are quite far from these realities--Indian stampedes and robots that find leaks--but the peacefulness here makes it surprisingly easy to focus and get on with the thinking.

Itinerary Part Two

Image: Thinking Man at the Taj Mahal

Just when I thought I was becoming numb to India’s “unique sensibilities” my family arrived to remind me that I live in the my own version of the Eternal Sunshine of a Spotless Mind, an upside-down, inside-out neosurrealist place where nothing ever happens in the order it should. Every time you think that, by golly, this city has its cow population under control, one just comes mumbling along out of nowhere.

My mom, an Austinite, and my brother, a Houstonian, visited two weeks ago, and having seen Slumdog, they were interested in partaking in the “slum tour.” I can’t say that it was entirely their idea. I presented them with options—and this one sounded like a step off the beaten path, and an interesting alternative to shopping in Bandra or getting Thai foot massages which my brother quickly vetoed.

This tour has been around for some time, but when people first started getting wind of it, many were outraged, for the same reason Slumdog Millionaire has gotten some slack: profiting on poverty. To be honest, I don’t think that the tour company is actually making much of a profit, but the fact of the matter is that the tour, and the film are “pro-slum dweller.” Reality and Slumdog have opened many an eye to the culture of begging and child prostitution in India.

The tour operators, Reality Tours and Travels, are actually trying to give visitors a new perspective on the lives of the poor and demonstrate that people living in this slum are not lazing around, as one might presume, but working very hard. Dharavi has an annual turnover of US$665 million, would you believe? Much of that comes from creating products for the West, or recycling our junk (old air conditioners and plastics from the US and the UK land here). As my mom said, “We are living off the backs of these people.”

It makes sense to try to understand how the other half lives--indeed this is how 55% of Mumbai's population lives--in slums. So, we went. This was just one of the "hotspots" I took my family to an effort to show them India's many wonders.

Here's the rest of our itinerary (starting from where I left off in my previous entry below):

Day 6: Taj Mahal...they LOVED it. At the end of the trip, they all said this was one of their favorite things. I think that they also wanted to say rug shoppping, which is what we also did in Agra. We didn't mean to buy 8x10 hand-woven rugs. It just happened. (Also visited Agra Fort, which was fantastic!)

Day 7: Breakfast in bed at the Imperial Hotel and three hours of Seinfeld reruns (this is our vacation, after all). Tour of Delhi government buildings, where several Indian tourists were much more interested in taking a picture of Scot's lady friend, than they were in taking a picture of the Parliament buildings. Verbal fisticuffs with our driver who was trying to pull the wool over our eyes. Shopping at FabIndia--Mom will now officially stick out in Austin upon her return. Dinner at Turtle Cafe in Delhi and then to the Old Delhi Railway Station in all its glory. Here, we took advantage of the porters dressed in red, who carried our luggage on top of their heads.

Day 8: Landed in Jodhpur after a night train ride--not everyone's favorite part of the trip. Banana pancakes for breakfast at Cosy Guest House. Wandering around Jodhpur's blue lanes to Mehangarh Fort. Guided tour and guided walk around old market. Home, nap, dinner, cards.

Day 9: To Rohet Garh, about an hour from Jodhpur. Lunch of Rajasthani food, Shirodhara massage--oil dripping on the head for 30 minutes--unbelieveably relaxing. Afternoon horseback ride on Marwari horses. Jeep to Wilderness Tents. Dinner.

Day 10: Early morning breakfast spread. Drive to Ranakpur, a huge Jain temple. Arrive Devi Garh. Cue music. Cue rose petals raining from the sky to honor our arrival.

Day 11: Udaipur. Palace. Mumbai. Sleep.

Day 12: Nothing like topping off a trip with a Dharavi slum tour. Lunch at Good Earth Tasting Room. Colaba Causeway. Indigo Deli. Home.

Day 13: Thai massages. Last minute shopping. Peshawari for dinner. Plane.

The sentiment, after this whirlwind of travel, seemed to be good. They liked India--in smallish doses. As I said goodbye, Scot's lady friend gave me a hug and said, "I survived!" No one got booted off the subcontinent.