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Thursday, July 19, 2018

INNOVATION SPECIAL.... 2018 K.R. Narayanan Oration: Dismantling Inequality through ASSURED Innovation PART I

2018 K.R. Narayanan Oration: Dismantling Inequality through ASSURED Innovation PART I
CSR 1.0: Doing well and doing good
Tata scholarships were a direct result of the sense of corporate trusteeship that Tatas had always demonstrated. Perhaps it is not widely known that world’s first ever charitable trust was set up by Jamsetji Tata in 1892, a long time before the Andrew Carnegie Trust (1901), Rockefeller Foundation (1913), the Ford Foundation (1936) and the Lord Lever Hulme Trust (1925).
The establishment of these trusts was driven by the Tatas’ belief in giving back to the people what came from the people.
As J.R.D. Tata had once said, “The wealth gathered by Jamsetji Tata and his sons in half a century of industrial pioneering formed but a minute fraction of the amount by which they enriched the nation. The whole of that wealth is held in trust for the people and used exclusively for their benefit. The cycle is thus complete. What came from the people has gone back to the people many times over.
The meaning of such philanthropy has changed over the years. What was considered as corporate trusteeship is now being called Corporate Social Responsibility (CSR). The Tatas did CSR, since they considered it to be their moral responsibility. The Government of India has recently legislated that 2% of the net profits earned by the corporates must be spent on CSR. I would call this as CSR 1.0. Here, part of the surplus wealth goes back to people, either by free will (as in the case of charitable or foundations trusts) or because of the need to comply with government legislation (like India’s CSR Act). So I would consider CSR 1.0 as `doing well and doing good’. This means after one has done `well’ by amassing wealth, one turns to doing `good’, by setting up charitable trusts or foundations.
What I wish to propose is CSR 2.0; not replacing CSR 1.0 but complementing it and bringing a far greater impact by touching the lives of millions. I call this as `doing well by doing good’. This means `doing good’ itself becoming a `good business’.
But why should doing good be considered important? The answer is simple – because rising inequality is one of the greatest challenges of our time. Income inequalities, for instance, create access inequalities, which leads to social disharmony. However, reducing income inequalities takes generations. Can we do the magic of creating access equality despite income inequality? Yes, we can – through CSR 2.0.
CSR 2.0: Doing Well by Doing Good
How do we achieve CSR 2.0? We have to make a change in the way we do business, a change in which we the policy makers think, the way in which we do science, etc. I will talk about the why, what and how of CSR 2.0 through which enterprises can `do well by doing good’.

What do Indian businesses need to do to achieve CSR2.0?
I propose that private sector can do well by doing good, if they adopt an ASSURED innovation strategy.
For me, ASSURED stands for the following:
A (Affordable)
S (Scalable)
S (Sustainable)
U (Universal)
R (Rapid)
E (Excellent)
D (Distinctive)
A (Affordability) is required to create access for everyone across the economic pyramid, especially the bottom. "Affordability” obviously depends on the target consumer’s position in the economic pyramid, the type of product, and its value and the opportunities it may help create. But for the 2.6 billion people in the world earning less than US$2 per day, such affordable products cannot just be “low-cost” but must be “ultra-low-cost”. Such extreme reduction targets require disruptive and not just incremental innovation.
S (Scalability) is required to make real impact by reaching out to every individual in the society, not just a privileged few. Depending on the product, the target population may only be a few hundred thousand, or a few million, though in some cases, it may reach hundreds of millions. We will cite examples of each.
S (Sustainability) is required in many contexts; environmental, economic and societal. In the long term, ASSURED innovation must promote affordable access by relying on basic market principles with which the private sector works comfortably, and not on continued government subsidies or procurement support. The crucial importance of this feature is obvious: higher output, better competition (i.e., competition induced by market-oriented players and not intermediated by political actors), lower cost to taxpayers, and – most importantly – the critical market check that ensures inclusive products provide a good value to consumers and represent a genuine social undertaking. It must be noted that the principle of long-term sustainable production does not negate – rather helps to highlight – the critical role of the government to establish and maintain a well-functioning innovation ecosystem capable of producing ASSURED innovations at a socially optimal level.
U (Universal) implies user friendliness, so that the innovation can be used irrespective of the skill levels of an individual citizen across the economic pyramid.
R (Rapid) means speedy movement from mind to market place. Acceleration in inclusive growth cannot be achieved without speed of action matching the speed of innovative thoughts.
E (Excellence) in technological as well non-technological innovation ( such as business model) , product quality, and service quality is required, not just for the elite few but for everyone in the society, since the rising aspirations of resource-poor people have to be fulfilled.
D (Distinctive) is required, since one does not want to promote copycat, ‘me too’ products and services. In fact, we should raise our ambitions and make D as in `disruptive’, which will be truly game changing.
Achieving all the individual elements of ASSURED Innovation looks seemingly impossible but not necessarily so as we show now.
Let us ask some challenging questions:
- Can we make high speed 4G internet available at 10 cents per GB, and make all voice calls free of cost – that too in a large and diverse country like India?
- Can we make high-quality but simple breast cancer screening available to every woman, that too at the extremely affordable cost of $1 per scan?
- Can we make a portable, high-tech ECG machine which can provide reports immediately and that too at the cost of 8 cents a test?
- Can we make an eye imaging device that is portable, non-invasive and costs 3 times less that conventional devices?
- Can we make a robust test for mosquito-borne dengue, which can detect the disease on day 1, and that too at the cost of $2 per test?
Amazingly, all this has been achieved in India, not only by using technological innovation but also non-technological innovation.

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