The theme for this year’s Shared Value Summit was “Equity & Empowerment”. We had prominent business thinkers and leaders who shared their perspectives, experiences and knowledge on the role of business in society. Some of the themes discussed are The Competitive Advantage of Equity and Empowerment, Passion and Purpose: Empowering Livelihoods Across Value Chain, Beyond Philanthropy: Redefining Business Models and Distributing Prosperity.
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/4″][vc_single_image image=”762″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][vc_column width=”3/4″][vc_cta h2=”Shri. Suresh Prabhu” h4=”Creating Shared Value”]No business can ever survive without two things; Profit and Customers. Doing a business is mostly about making profits to give returns to the shareholders.
Companies make a profit by selling product or service to the customers. Customer helps businesses to make a profit and in the process, by their action helps to create an organization which in turn sometimes comes at odds with the society, of which the customer is a part and become a victim themselves. There should never be a confrontation relationship between society and business as no business can ever survive without society. But if the society feels that the relationship is not solving some of their issues, then the long-term sustainability of the business becomes very difficult.
There were times when the businesses need not have bothered about what society thinks about them because their business was guaranteed by some of the state policies. In some cases, the state supported the business, and it was the responsibility of the state to ensure that the business was carried on properly. But with more and more democratization of not only political but also economic decision making, we are now seeing policies becoming friendly to business and society.
We need to develop a relationship which embodies both the functions that are making profits so that both the business and society grow simultaneously. Social concerns must be taken on board by business in such a way that the concerns are not created at all.
CSR is needed to take care of various social issues. If a society evolves as a partnership between state and business in which such matters are taken care of as part of public policy, then this will help create a situation that will not allow the issues to rise at first hand. This can happen only when we have an evolved society and the three stakeholders; state, business, and society working in tandem and have a relationship in which the values are universal. Mainstreaming of all social concerns in state policy, business strategies can eliminate the existence of the need to have CSR.[/vc_cta][/vc_column][/vc_row][vc_row][vc_column width=”2/3″][vc_cta h2=”Justin Bakule” h4=”Concept of Creating Shared Value”]
India’s stories related to shared value has been featured around the world. The story of the high school girl Rejaul from the first shared value summit India was shared at the global summit in New York. The stories of 3 young women entrepreneurs working to inform and change the gender dynamics in the country have been inspirational for the Shared Value Initiative.
Despite the uncertainty in the political dialogue, the current situation of business opportunities in the US is great for large multinational corporations. Corporate earnings are up, markets have grown substantially, a massive tax cut for US business to spur additional growth, unemployment is incredibly low, a robust operating environment and reductions in regulations. This has helped the corporations in US and even globally to address issues like equity, gender equity, racial equity, racial dimension; pathways to employment for underserved by tying them to business issues.
Initially the idea of corporates solving business problems was controversial. The traditional view was that working on social issues comes under the purview of government and civil society. The dialogue has turned, and CEO’s of corporations have started participating in the conversations. It is also about competitiveness and how business would compete in the future. Competing by helping solve social problems that are fundamentally related to business in ways they provide value to them and society.
He shared a couple of examples which illustrates the components of success and how companies achieve scale. He also asked people assembled in the room on how far their organization has gone to embedding social issues in their core competitive strategy. How has one gone from linking those issues to operationalizing it in their businesses? Under the CSR law, how do they view the portfolio of activities engaging within society? Is the CSR law seen as a regulation and a cost imposed on the organization or do they consider it as a part of a portfolio of business investments that created content and context for business success?
Examples of connection to strategy, operationalizing it and enabling conditions within the business that are required for success are;
- Enel – an Italian utility company – provider of energy and formally a state-owned company in Italy with substantial business in Spain
- Walmart – the largest company by revenue in world – they are thinking holistically about social issues and their businesses
Enel was all about transforming the business model. Their business is in energy distribution and generation. They wanted to grow their business from state-grown enterprise and wanted to expand geographically. They committed to do 100% into renewable energy (solar, wind, geothermal etc.) and expanded to Latin and North America. As they were developing the business, they were learning about how to run a new energy generation business, and they used their learnings in Italy to replacing their fixed assets. They had learned and innovated within the business model in the energy market. Enel then looked at their development pipeline; identified new places for energy generation, upgraded their technology and in the process worked for community development.
Walmart historically worked towards sustainability and minimizing costs. They always had a problem of getting people to work in their stores. They then engaged with the underserved youth to work in their stores and created a pipeline of employment. They had a partnership with social service providers and nonprofit working with underserved youths and changed the process of hiring.
Enabling conditions within the business
Where do the initiatives sit within the organizational structure? Who is responsible for them? Have we changed their incentives on how they are remunerated/rewarded and risks they can take for meeting business and social objectives?
He shared the example of Becton, Dickinson where the need in BD is to have shared value meeting unmet health needs is the source of new business opportunities for them. How can it be built within strategic planning process around the business to make sure it is being planned on annual basis and goals are met.
Visibility of Leadership
Position of leaders within the organization and their approach to embracing issues within the company. Doug McMillon, CEO, Walmart wrote about the importance of these issues to the overall performance of Walmart in the annual report.
The above are some of the critical elements that look like for a company to have social issues central to competitiveness and core strategy in addition to what the positioning would look like in business and society.
We are also building a shared value enterprise diagnostic and working on data visualization. The key is to drive the enterprise level change. The data depiction would help the companies track the progress on enterprise level change and unlock their ability to deliver business and social results.
He also urged the people in the room to see what it looks like to embed the social principles in business, what is the plan to unlock greater shared value creation within their organisation or non profits and governments that one is working with.
There has been a change in the dialogue related to shared value over the years from defending the concept by quoting examples to active participation from the CEO’s and leaders from business world.
[/vc_cta][/vc_column][vc_column width=”1/3″][vc_single_image image=”3282″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][/vc_row][vc_row][vc_column width=”2/3″][vc_cta h2=”Prof. Ramesh Chand” h4=”Agriculture & Shared Value”]Shared value can be applied to the micro level, level of firm, organizations etc. The concept of shared value must lead to shared prosperity and address the concerns of about 67% of the people who live in rural areas and 48% of the population which work in agriculture.
After the 1991 economic reforms there was an increase in growth rate but there was a sharp increase in disparity among urban areas, rural areas, farming and non-farming sector. The focus of the 11th five year plan was towards inclusive growth which was then topped up by sustainable growth in the 12th five year. The 12th plan mentioned 13 flagship programs but only 1 program was about economic enterprise while all the others were related to social development. Hence it was obvious that if we are not using a vehicle of economic enterprise to address the disparity, it is not going to decline.
The present government also believes in inclusive development “Sab Ka Sath Sab Ka Vikas”. To see whether growth is leading to inclusive development we need to look at employment. The statistics for the rural employment provided some strange facts. Share of rural India in manufacturing was only 25% in 1970-1971 which increased to 51% in 2011-2012, meaning thereby that more value addition to the industry was done in rural areas than in urban areas. Surprisingly the employment in the industry sector declined in rural areas than in urban areas implying that the jobs that went to rural areas stayed in rural areas. This means that industries are just creating pollution in rural areas but are still not creating enough jobs. As a part of national income the value added for rural area increased 7 times but employment did not even double. A lot of rural economy is non agriculture i.e 63% in 2011 and projected it to two thirds as non agriculture and one third as agriculture.
The growth rates of different sectors after 2004-05 shows that the value addition by industrial sector in rural area increased by 15.87% every year but the jobs in manufacturing in rural India only increased by a meager 0.67%. The industrial expansion in rural India has been totally employment insensitive as even after taking the industries to the rural areas the issues of skill development has not been addressed and the jobs have not been created for the rural people. Overall employment in rural India after 2004-05 shrunk and the suicide rate of non-farming sector was more than the suicide rate of farming sector.
India saw a sharp decline in women agriculture workforce after 2004-05. Most of the males who withdrew from agriculture workforce went for higher education but only one-third of the females who withdrew went for higher education and remaining stayed at home even after most of them belonging to household coming under below poverty line. We need to pay special attention to women withdrawing from farming sector.
The education profiles of those who are employed in industry shows that only 1.6% of the rural workforce working in manufacturing has technical education while 15% has vocational training. While 27% of men have completed secondary education only 11% of women have this kind of education. Looking into the reason for declining women workforce it was found that due to some conflicts in the cultivator and labour class in rural areas, the people like to keep their women at home as they fear violence. Also the industries in the rural areas are atleast 10-12 kms away with absolutely having no provision of transportation. In some cases the labour was more educated than the cultivator and they preferred working in an employee – employer framework rather than a master – servant framework. Private sector has an important role to make the rural people employable and then give them employment.
Industry in rural India followed more capital intensive approach than in urban areas. This is because one would find skilled people in urban areas and not in rural areas. In rural India the proportion of new industry is much higher than that in urban areas.
In an important step for agriculture, NITI Aayog has asked the central as well as all the state government to change regulations in order to increase the private sector participation at all stages of the agriculture cycle. Currently the share of corporate investment in the total annual gross fixed capital formation in the agriculture is only 2.4%, 84% is by the farmers and 13% is by the government. We need to ensure that industry does not sell pesticide but sells pest control. Unless organized capital gets into agriculture market it will be very difficult to ensure that market gets integrated spatially over time. With a number of opportunities under RKBY, a lot of money is allocated for value chain and food processing. SAMPDA gives 35% grant if investment is made in cold chain. The agricultural sector will see a lot of change in the regulatory framework and setting up of a private market will be allowed. There is now a need for the private sector to come forward and look at the new environment and contribute to the inclusive development of India.
Role of Corporates
We have small-scale success stories in India. He shared some stories of farmers who are cultivating vegetables and exporting them outside India. On these farms, women are given employment on a regular basis. Similarly, in some parts of India, we would have farmers cooperative producers where many women get employment in packaging, food processing, etc. But, scaling up is not happening as farmers are not willing to part way with their lands. The industries require large amounts of land to do large-scale farming. They are not willing to work with the farmers. With the intervention of WEF and other private sectors in Maharashtra – IPPAD initiative – there is some support provided to private sector to work with one village or group of villages, de-risk farmers by giving them quality seeds, right kind of extension, help in technology and assure them that they would get remunerative prices. A few years ago the regulation was against private sector entry into production activity and marketing. But things have changed in last few years, and most of the states allow contract farming. We have good models in India but we need to look at scale ie. how to scale up small experiences in every state.[/vc_cta][/vc_column][vc_column width=”1/3″][vc_single_image image=”5598″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][/vc_row][vc_row][vc_column width=”1/4″][vc_single_image image=”4588″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][vc_column width=”3/4″][vc_cta h2=”Ajaita Shah” h4=”Creating Shared Value”]Ajaita talked on how the concept of shared value has been a brilliant way to look at partnerships that can effectively allow one to think about resource optimisation, better scale potential, value for money and what it takes to do it. While clean energy solutions can address the issues of darkness, fear, and instability in rural India, the penetration of these solutions is between 5-7%. To address this concern so that the solution reaches the last mile faster, frontier markets built a model for scale through technology and partnerships with women in the center of the value chain. The company partnered with NGOs to recruit rural women who had zero income and helped them become a micro-franchise. They were then supported by technical training, market activation, and technology and were given access to innovative product solutions which they were then able to sell to rural households.
The frontier market has built a network of 1000 women entrepreneurs selling clean energy solution like solar home systems, solar appliances, solar cookstoves to 400000 people in Rajasthan impacting 2.1 million people. The women entrepreneurs have earned a total of 2.5 million dollars in revenue and help create 9.2 million dollars of savings. The company continues to support them by co-creating the solutions. Innovation only happens when one works with the last mile rural household. The company has launched a 22W solar TV with built in free cable and HD & HDMI access for under Rs. 12000, a solar blender for dairy farmers to understand the value proposition of when they need it, solar induction stoves and has set up biomass stores. All kinds of solutions are required for cooking purposes as they are the center of the value chain. The company continues to engage with the women through mobile phones to understand about the next innovation, its value, and the scale potential. She stressed on partnerships which are very important.
Frontier Markets works with local Indian manufacturers who are good in manufacturing but lack the knowledge about the right solution. When they start creating the products they can drive down costs and impact more lives effectively.
She also talked about scale. Frontier Markets is working in Rajasthan with 1.2 million households, but they have only covered 400 thousand. So, it is essential to understand focus and scale. To do the scale, partnerships are required in a very different way. Ms. Shah then told about how she looks at the partnerships through shared value perspective and how it allows her to think about resource optimization, better scale potential, value for money and the whole process around it. To strike a good partnership, the company has to self-assess on its strengths, weaknesses and challenges. To reach six states, make 10000 women entrepreneurs and generate revenue of 26 million dollars by 2022 the company had to strike right partnerships. It was then that Frontier Markets and Barefoot college came together to talk about their challenges and it was observed that the problem of one company was the opportunity for the other. The companies then came together to align their mission which was,
- Empower the rural household by economically empowering rural women,
- Believed that clean energy is an essential answer to productivity and the challenge of the electricity crisis is a real one,
- Quickly scaling up their business with the deep level of financial and social impact
The next big challenge was how to achieve all the things in their mission. The most important things to do so were the intense level of trust, transparency, critical thinking and honesty. An entire value chain was then listed which lead to recognizing their shortcomings of
- not using the resources effectively,
- not recruiting the people properly and
- stretching too thin
After coming together and separating the values, the company had a very different way to co-share the resources which led to the planning of 6 state scale and understanding the economic requirement to achieve it together. There were no longer two financial models but one financial model which integrated every single element of what was needed and helped understand as to what are the strengths. The company was having the right kind of financial model, with the right kind of capital for the right kind of work and tracking. One part of the company was good at technology, monitoring & evaluation and training the other half product innovation, marketing, and understanding as to how to get the women to earn money.
When the partnership was announced, it was either the joyous celebration or skeptics. The skeptics had a view that both the companies were having very different philosophies but then both care about the poor and feel that they must be empowered and hence have a much-aligned philosophies. The other thing of concern was about the utilization of resources together effectively but coming together will help the companies to scale and reach from 1000 to 10000 women entrepreneurs with a process, system, vision and understanding that’s aligned through cohesive partnerships.[/vc_cta][/vc_column][/vc_row][vc_row][vc_column width=”2/3″][vc_cta h2=”Amal Kelshikar” h4=”Abbott’s Innovation “]Mr. Amal Kelshikar shared his perspective on what innovation means in India. He described it with the one having two parts one is innovation and other is a renovation. As a nation, India excels in renovation which is about doing incremental things which shows its capability and the potential. When we see a need we can adapt it regarding value, scale it up regarding the reach and what we can do to make it relevant to the marketplace. We are extremely good at driving that relevance.
India has a significant opportunity regarding innovation with a potential to do more. It has all the capabilities and brainpower for creating breakthrough technologies, but there are questions on the means, resources, infrastructure, a partnership between academic and industry. There are also questions on the ability of monetization of the innovation, the kind of ecosystem whether it is the regulatory landscape or it is regarding protection that the individual gets. There are questions about the funding and the risk-taking ability for the long-term innovations.
Mr. Kelshikar then quoted Prof Michael Porter “Innovation is centric to economic growth.” He then added that a lot of people believe that innovation and access cannot co-exist. But we live in an “and” world. We need to drive both economic growth and value. We do need fundamental foundations, i.e., a strong education system and a good healthcare system but we need to drive a right balance between breakthrough innovation and access. It is important to create partnerships between public and private sector to make that access. We need to have a solution for that, but we then are constraining a lot of our innovation potential. There is a lot of opportunities in the startups, incubators, funding, accelerators but we have to explore the potential to do more and not restrict ourselves.[/vc_cta][/vc_column][vc_column width=”1/3″][vc_single_image image=”4557″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][/vc_row][vc_row][vc_column width=”1/4″][vc_single_image image=”4587″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][vc_column width=”3/4″][vc_cta h2=”Ashish Karamchandani” h4=” Scale “]
Over half of the world lives on less than $2.5 a day. Over a billion people are illiterate, over a million people do not have access to clean water, and over 2.6 billion people lack basic sanitation. The challenge here is that problems of the world are at scale and that is the reason the solutions need to be at scale.
Traditionally, to address scale, there has always been two paths. One is going towards private sector which leads to economic growth; increase in jobs which in turn will lead to prosperity and lead to success at scale. The other is a complete government path which focuses on providing primary good quality life. Unfortunately neither has worked as one has led to the economic disparity while the other has not been able to ensure quality. There is now a third way to do it, and that is to do it through markets or market-based solutions, having a commercial viability through social impact.
Mr. Karamchandani here added, “You do not have to go from the top 20% to the bottom 10%; there is a group in between that can be helped so that the government can focus on the bottom 10%.” India is a country of working poor (Richshaw Puller, Tea Stall Owners, Driver, etc.) and all of them are buying the products and services from the private sector. Their children are going to private schools and are going to good local doctors for medical care. The market is serving them exceptionally well for commercial products, but the quality of healthcare and education is very poor. The working poor in urban India today is 70% of the total population, 20% are richer, and 10% are poorer. The urban problem is not of absolute abject poverty but is of struggling working poor. These urban poor live in rented houses which are in a very poor condition which they get after spending 25% of their total income. In 2006, FSG came up with the idea of providing affordable housing with the EMIs of the same amount as the rent after a small down payment. With no developer and no financer agreeing to the idea, overcoming the odds was a big task. It was then that some of the banks agreed on doing pilot projects with minimum documentation of the beneficiaries. The next challenge was to provide 300 sq ft houses which were never done earlier. A developer from Ahmedabad agreed on making those houses but asked for confirmed customers. 450 clients were then signed for the first project from the factories in Ahmedabad. After the first project was live the developer had a waiting list of 9000 customers, and it was then that other developers joined in for the similar projects. A new housing finance firm MHFC then agreed for providing loans to these new customers who were again followed by many others.
The most important part of these projects was the loan finance, and by the year 2013, ten housing finance companies were giving loans to people with almost no documentation for about 80,000 houses. According to the latest study, currently loans of up to 15000-25000 crores are given out to people in this segment, and it indicates the possibility of scale with the private sector.
Mr. Karamchandani speaking on the scenarios in different sector quoted “It is not easy to make money and create social impact. The business model is critical to do so. It takes a lot of hard work, and time.” He further added that FSG after taking a grant from World Bank asked for a two years period to show profits, but it took them six years to show that their model works.
Another important thing is that these markets are tough and do not work on their own. The value chain for most of the industries does not exist. FSG wanted to provide housing instead it also had to provide housing finance. The second challenge is that the public goods do not exist in the market. It is the competitor that benefits if an organization comes up with something good for the society. The last challenge is to the government putting rules that are not practical in some instances.
Mr. Karamchandani here put across his concern about how he has not been able to see the scale. He stated that the corporates do shared value which fundamentally doesn’t think innovative business models instead they make money on an existing model. On the other hand, if we look at social entrepreneurs who have great ideas, but the scale is not there in their DNA. We need people who have experience of building scale organizations and going out and working in the social world. We need to combine the expertise of the corporate world and innovation of the social enterprise.
[/vc_cta][/vc_column][/vc_row][vc_row][vc_column width=”2/3″][vc_cta h2=”Ketan Kapoor” h4=”Innovation “]
Mettl is into measuring skills and talent of individuals for companies. How to measure a skill and what should be measured, provided a scope for innovation for the company. The challenge was to prevent unfair means of taking the tests specified in a scenario when someone is taking a test remotely, e.g., in their homes and at a time of their choice. The other challenge was to do so without any need for infrastructure or any specialized equipment. The last challenge was to decide upon what data to give to the companies which will be helpful for them to improve on the performances of the individuals.
Mettl is the world’s largest proctoring assessment company and does around 20 million assessments annually. Some of the challenges that we have solved are about ensuring the authenticity of the test taken by using the webcam on different bandwidths while reaching remotest places across the country. Algorithms to capture secondary images for lower bandwidths, get the environment audio of the test taker and capturing of the metadata were used. Artificial Intelligence was used to predict the change in face, detection of two faces, and detection of no face during the assessment which was done through linking to aadhaar platform. The company also came up with distraction score for the authenticity of the test taken.
Mettl has also reached scale and speed regarding conducting an assessment in one day. It is also working with government organizations and is the largest partners for the ministry of skills. Every evaluation is treated like a movie, and the entire test session can be played even after two years. Special care is also taken for the security and the customer experience as it has to be simple for the wide variety of people taking the assessments.
[/vc_cta][/vc_column][vc_column width=”1/3″][vc_single_image image=”5597″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][/vc_row][vc_row][vc_column width=”1/4″][vc_single_image image=”4606″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][vc_column width=”3/4″][vc_cta h2=”K Chandrasekhar” h4=”Innovation & Patenting”]
Forus Health is a medical devices company and was set up as the magnitude of preventable blindness was very high. We needed to create equipment which was the social motive but also wanted to do this with technology and innovation.
The first equipment was a head-mounted display with cameras picking retinal images, we took it to Aravind eye hospital, and they told us that this equipment would be used in rural settings where an ophthalmologist is not available. According to the perception of the people the machine should look like an ophthalmology device so that they take the result seriously. We then reoriented ourselves so that the equipment looks like an ophthalmic device but also is portable, rugged and affordable.
There were also some limitations as the device was to be used in rural areas and with undilated images. The pupil size is small in India (about 3mm approx.) we also wanted to use LED lights, and we were using semo sensors which were evolving at that time. This challenge helped us creating patents. When we started, we did not have the ability to do the patent search. It was after the venture capital funding that we had to do a IP diligence and found that not only we were innovative but also were not infringing on other products. This was possible because we had a problem statement which we tried to address with technology from an affordable standpoint. Today we have filed more than 21 patents, and 5-6 patents have been granted to us from the US. We also do “Freedom to Operate” means we not only create innovative products but also do not infringe. The whole process is expensive but to remain relevant internationally, one must go along to maintain both process hygiene and patient hygiene.
Today international companies are becoming a distributor of an Indian product which is possible because it is well differentiated and solving a lot of on the ground problem. We created a lot of opportunities from a product perspective as a single doctor can buy one instrument and can move it from one place to another.
So, if you ride on an innovation pillar it gives you a product differentiation, and that becomes your competitive advantage. When you integrate it with a business model innovation where you reach people in innovative ways, then you have a broader mission.
Examples from last two years:
- 13000 people were screened for seven days in Siddhivinayak temple and 14% found with abnormalities.
- In Indore, 15000 truck driver and private car drivers who had applied for license renewal were screened over a period of 4 months. Around 35% of the drivers tested had eye problems, and 4% were color blind.
Innovation is critical to solve problems and to scale and build on a global level. Also, the patents and working procedures help you to stay competitive. These procedures also help you to keep the cost competitiveness high.
[/vc_cta][/vc_column][/vc_row][vc_row][vc_column width=”2/3″][vc_cta h2=”Himanshu Jain” h4=”Creating Shared Value”]
Having social issue as one of the core of the corporate strategy is a critical parameter to define whether it is a shared value or not. The whole purpose of Shared Value is generated from the fact that philanthropy alone is not enough to make a difference in the society unless the business is integrated with a social cause. If we leave social benefit as part of the business model, it will be difficult for the development sector to take the social agenda ahead. It is believed in India that corporates cannot survive without funding and money. In fact, corporates do the most important job of generating wealth in the society. The challenge comes when the wealth generation is at the cost of community. It is desirable if it is in harmony with the society. So, its the input plus value which a corporate adds to get an output from where comes profit.
Diversey is a leading cleaning and hygiene company, but the people who work with us are not living in hygienic condition. Being a cleaner is a stigma in our society and Diversey took the responsibility of trying to make a difference to this paradigm through their project “Garima.” “Garima” is about dignity to the janitor. It’s making him realize that he is no less than a doctor as he is in the job of preventing illness. We need to look at them with high respect as they keep the environment disease free. The janitors are called hygiene technician instead of a janitor, and the idea came from Japan.
“Garima” accesses unemployed people of any age, any education background, and no minimum education is needed. A standardized training program is given to them, and they are tested for learning on how to clean, sanitize, the importance of each step, how to protect themselves, etc. The one-week training program delivered by “Doctors for you,” where 4000 people have been trained in the last 12-16 months, and we intend to take it to 10,000 by the end of March 2018.
The whole idea of project “Garima” is to make a collective impact in society. We have partners who are looking forward to trained manpower. So, when we train their trainers, and they train their people, the efficiency goes up, they get ready to work force thus creating jobs.
It creates the following benefits:
- It reinforces our leadership position in the industry
- It improves cleaning understanding and respect for cleaning as a profession
- It enhances the dignity of the janitor by the way they are treated and the kind of equipment used by them
- It brings employment
Impact: We have spent two crores and have generated about 150 crores of economic value for the industry.
Result: The company gets a lot of goodwill and faithful customers for the future
Project “Garima” can be looked like a shared value initiative as it is about integrating it into our business model. In the process of expanding our market, the society is being benefited significantly, creating economic value and preventing diseases.
[/vc_cta][/vc_column][vc_column width=”1/3″][vc_single_image image=”708″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][/vc_row][vc_row][vc_column width=”1/4″][vc_single_image image=”4547″ img_size=”full” alignment=”center” style=”vc_box_border_circle”][/vc_column][vc_column width=”3/4″][vc_cta h2=”Rajiv Gupta” h4=”Shared Value in Neem Project”]
Dr. Rajiv shared GNFC’s story – a story about neem and urea which has benefited thousands of rural women and has the potential of helping more. Urea is one of the most popular fertilizers in the world. More than a 100 million farmers use about 31 million tonnes of urea in India of which 24 million tonnes are produced by 26 urea production companies, and rest is imported. 70% of the variable cost of urea is oil and gas, and therefore the cost of production of urea is about 250 dollars per tonne, but the selling price of urea is $85 -$90. The government subsidizes urea to a tune of 6 – 7 billion dollars per year in the interest of the farmers and this price differential has been one of the greatest attractions of diversion of urea. Till recently urea was diverted for making formaldehyde for production of lemonades, CPC blues for making industrial dyes, for production of cattle, poultry and fish feeds and even for thickening of milk. After the decision by Government of India that all urea that is either produced or imported shall be coated with neem oil has completely stopped the diversion of urea. This process has even increased the productivity of urea as neem oil reduces the base of nitrification and hence more urea is available for a more considerable length of time in the soil, and the country has saved a billion of dollars by reducing the import of urea in the last one year.
India consumes 31 million tonnes of urea and to coat that quantity of urea 26000 tonnes of neem oil at the rate of 800 gms of neem oil per tonne is needed. For the production of that quantity of neem oil 400,000 tonnes of neem seeds are required for which 16 million neem trees are necessary. After this policy mandate, GNFC worked on backward integration and simultaneously created shared value with a special emphasis on empowerment of women by creating additional income generation, additional employment generation opportunities and thereby improving their livelihood prospects.
Four pillars of neem project are – sourcing, storage, extraction & quality control and forward integration. Collection of neem seeds was a logistical challenge which was solved by neem mapping the entire state of Gujarat, identifying 22 districts based on the high density of neem trees and leveraging all kinds of community structures – NGO’s , village co-operative societies, self help groups , water committees to create a vast network of 200 village level collection centres catering to 5000 villages. Another layer was created for 300 service providers for various activities – screening, baggage, storage, transportation and giving daily wages to women. We also made sure that a women worker did not have to travel more than a kilometer during a day to deliver neem seeds and ensured the payment was given the same day. To solve transportation issue, expeller units were set up in the company.
Under the neem project, 45000 tonnes of neem seeds were collected within three years generating almost 10 million dollars of additional income to about 4.5 lakh women and 2.5 lakh of other people who were involved in the operation. There was a total production of almost 3600 tonnes of neem oil and most importantly an eight-fold rise in the income of these women.
After the success of the backward integration model, a forward integration model was rolled out by GNFC. The company started making neem soap, neem shampoo, neem handwash, neem facewash and a whole range of different kind of neem products which are produced by SHGs generating further employment.
So, neem project is innovative, community-led and integrated.The complete model has been institutionalized from individual seed collectors to village level collection centers to service provider partners down to the company.
The project has been expanded to other states of India. 98% of the women are happy in being associated with neem project. This has led to the following.
- Substantial increase in the economic decision making within the family
- Increase in expenditure on health and education by 140%
- Seasonal migration has stopped
- Decrease in domestic violence
- Creation of assets
The neem project has turned landless laborers into wage earners and wage earners into rural entrepreneurs.