Gandhigiri for sustainable growth

Innovation at leading Indian companies suggests that inclusive growth policies are beginning to have the desired effect in rural areas and on the urban poor. But much more is required from the government and industry.

In two days, we will celebrate the 141st birth anniversary of Mahatma Gandhi. It is only appropriate that we consider how his life’s core principles relate to our own economic times.
    
Historian Ramachandra Guha has described Gandhi as the single most important influence on the environmental movement in the country.

His assertion, “the Earth has enough for everyone’s need, but not for anyone’s greed” has been repeatedly invoked by environmentalists. He made an equally-prescient statement, “It took Britain half the resources of the planet to achieve (their) prosperity.

How many planets will a country like India require?” These Gandhian ideas go to the heart of concerns about the sustainability of economic growth in the world in general, and India in particular.
    
We are now at a juncture on the road to growth where we face two choices.

The first is unconstrained economic growth that enables us to race ahead to the future, but with significant downsides such as weakened long-term economic security and well-being due to non-renewable resource constraints, climate change and environmental damage.

The other path is sustainable growth, which is the use of sustainability-based innovations to develop products and services, business models and platforms, and infrastructure.

Sustainable Growth 1.0, 2.0, 3.0
In the June 2010 issue of Harvard Business Review, Prof C K Prahalad made one of his last contributions to management thought by introducing, with his co-author R A Mashelkar, the notion of Gandhian innovation.

These are business innovations that embody two core principles that Gandhi lived by: affordability and environmental sustainability.

We can add a third core principle in Gandhi’s philosophy: freedom from authoritarian control and a general distrust of the central authority. Sustainable growth can be considered Gandhian growth because its business innovations are rooted in these three principles.
    
As illustrated below, the mid-1980s to the mid-1990s in India may be described as Sustainable Growth 1.0. In this period, the easing of many government controls led to business, technology and policy innovations that initiated decentralised growth in the economy.

These changes, although partially implemented, illustrate the first core Gandhian principle: decentralised control. The adoption of these innovations then exploded in the next decade, 1995-2005, and resulted in a boom in economic growth.

This decade also planted the seeds for innovation that initiated inclusive growth by making products and services more affordable to the vast majority of Indians.

In turn, Sustainable Growth 2.0’s rapid expansion will likely be the decade 2005-2015 in which we are halfway through, fuelled especially by business innovations that target bottom of the pyramid. It, therefore, illustrates the second core Gandhian principle, affordability, and has now become the national agenda.
    
Our research of innovation at leading Indian companies — including Hindustan Unilever, ITC, Larsen & Toubro, Novartis and Sanofi-Aventis — suggests that inclusive growth is now rapidly reaching millions of consumers in rural areas and the urban poor.

These innovations span consumer products, procurement, infrastructure construction skills and healthcare, and use a variety of business models to make them scaleable.

They may be considered as ‘next-practices’ platforms, because of their ability to scale across markets and regions.
    
These companies are also well-positioned to extend their innovations to Sustainable Growth 3.0, which may be described as eco-friendly growth.

In this phase, innovations from previous phases get even more deeply embedded in business practice, and also result in eco-friendly innovations being deployed.

Leading companies such as Cadbury, Cosmos Ignite, Future Group, Mahindra & Mahindra and Wipro are implementing next-practices platform innovations that span sustainable farming, energy-efficient lighting for the poor, consumer recycling through retail, eco-friendly construction and transportation, and energy-efficient IT, respectively.

These 10 companies are the tip of the eco-innovation iceberg, and illustrate Gandhi’s third core principle of environmental sustainability.
    
It is encouraging that the government is finally putting together some of the policy pieces required for accelerating Sustainable Growth 3.0.

These include measures such as the carbon tax on coal to fund clean energy, the perform, achieve and trade (PAT) mandate for energy-intensive facilities to reduce energy consumption, the National Solar Mission to implement 20 gw of solar power by 2022 and several other initiatives announced earlier this year. But the devil, as always, is in the implementation of these policies.
    
There is much more that needs to be done. As Nandan Nilekani points out in his book, Imagining India, sustainable growth will be more effective when there is greater local control and clearer property rights over local environmental and energy resources.

When it happens, it will represent a deepening linkage of the Gandhian principles of decentralised controls and affordable access with that of environmental sustainability. Sustainable Growth 3.0 is then likely to escalate rapidly in mid-2010s to mid-2020s.

Drivers of successful change
Market demand is a greater driver of new behaviours than regulations, especially if the latter are poorly enforced. For Sustainable Growth 3.0 to accelerate, eco-friendly growth needs to be viewed as a business opportunity, rather than merely a reduction in risk from non-compliance.

Sustainable Growth 2.0’s lessons are instructive: inclusive growth took off because companies realised it was a great opportunity to do well financially by expanding markets while simultaneously doing good to society.
    
There is another big driver of change that Gandhi used masterfully, which proponents of Sustainable Growth 3.0 could do well to emulate.

It is the creation of an identity around the intended change that the average Indian could easily relate to during the Independence movements.

It represented a fearless Indian throwing off a colonial yoke and was created through symbols such as the charkha and the lifting of sea salt at Dandi, new words and phrases such as satyagraha and Quit India, and by anchoring in values such as ahimsa that define our heritage.
    
Perhaps we should take a leaf out of the Mahatma’s notebook to locate where to search for such an identity. He did not believe that, traditionally, distinct spheres of life — such as economics, nature, personal health and habits, and society — should be kept separate in pursuing his work.

Instead, he sought to integrate them into his way of being and doing. There is a sphere we have overlooked until now in this essay. It is our own enduring Indian culture.

More precisely, it is our ancient worldview found in the Upanishads relating humanity to nature, which transcends Hinduism itself and is secular in its outlook. It was the foundation of the Mahatma’s life and guided his every action.
    
We can begin with an idea that the Mahatma considered a mahavakya (great saying) in the Upanishads. It occurs in the very beginning of the Isa Upanishad, Tena tyaktena bhunjitha.

It is the identity of a steward for this world, rather than an owner who could do as he pleases with it. Its extended meaning, “renounce ownership of the world and enjoy”, embodied Gandhi’s life.

Ultimately, sustainable growth is about growth through stewardship and conservation of society, nature and its resources. This view has been an integral part of our culture for over 3,000 years.

It is reflected in our innate thriftiness in everyday life, which Gandhi again exemplified through the many stories of his frugality.

It is also evident in the numerous professions that make a living out of recycling and reuse, such as the local kabadiwala on every street.

However, as our culture becomes more oriented to acquisition, especially in a rapidly-growing economy, we risk letting go of these habits that have served us well in the past.
    
There is another analogy we can draw from the Upanishads regarding unconstrained and sustainable growth. In Katha Upanishad, the god of death Yama tells the boy Nachiketas of the two paths that lie before us: the path of pleasure (preyas) and the path of preference (sreyas).

The former is sweet initially but soon turns to poison. The latter is like poison initially but then turns to nectar that provides sustained joy.

Yama also compares this path to walking on the edge of a razor (ksurasya dhara), but it gets easier as we progress on it.
This search for a greater path of conduct in life occurs throughout the Upanishads. Sustainable growth is like this greater path: difficult initially, but good for the world and good for the business enterprises that stay with it.
    
The sages who composed the Upanishads over two millennia ago were visionaries like Gandhi. We can learn something enduring from them, and from this more recent Mahatma.

While many leading Indian companies are making a good start, we need to build a broader base of support to scale these efforts throughout Indian businesses and consumers.

By tapping into the sense of stewardship and conservation already embedded in our national culture, we can build a national identity around this greater path of sustainable growth.

Inclusive Growth Innovations

Pureit (Hindustan Unilever)
Consumer products for mass consumer
Range of products to enable safe drinking water by protecting from water-borne diseases

e-Choupal (ITC)
Rural markets
Procurement services, rural distribution of goods and services, financial services (insurance & credit) and rural retail stores

Construction skills training (Larsen & Toubro)
Underprivileged youth
Increase training and employability of youth in construction jobs through training institutes

Arogya Parivar (Novartis)
Health services for the poor
Promote healthcare among the rural poor through direct education

Prayas (Sanofi-Aventis)
Health services for the poor
Promote healthcare among the rural poor by training medical practitioners

Eco-Friendly Innovations

Sustainable cocoa farming (Cadbury)
Coconut farmers
Use of cocoa as an intercrop between coconut or arecanut in otherwise-unused land

The Great Exchange (Future Group)
Retail customers
Encourage customers to return unused items in several categories in exchange for coupons
   
MightyLight (Cosmos Ignite)
Poor in rural and urban areas
Solar LED lighting and micro-energy for domestic use among the poor

Mahindra Reva (Mahindra & Mahindra)
Automotive customers
Electric vehicle technology, including electric drive train, through majority stake in Reva

Wipro Green PC (Wipro)
Computing customers
RoHS-compliant, Energy Star rating 5, ranked #2 green electronics brand globally by Greenpeace

Name of innovation (name of company), targeted market & innovation description These are illustrative innovations considered in-depth by the authors. Many of these companies have several innovations across a variety of categories spanning both inclusive and eco-friendly growth