We cannot have islands of prosperity next to oceans of poverty and squalor

I recently attended the US India Business Council’s (USIBC)  32nd anniversary celebration in Washington, DC, which was attended by over 500 people and featured global business leaders, US companies who have a growing presence in India and industry-leading Indian companies. What was exciting was not only to see people crowded together to discuss India’s attractive landscape and GDP growth but to hear business leaders come back time and time again to the need to think about a more “inclusive” growth, one that includes the 75% of people who live in India’s villages and 80% of people who earn less than $2 a day in India, and have so far been excluded from this growth – an issue that we at Acumen Fund work to address on a daily basis.

Mukesh Ambani, who received the Global Vision Award, accepted it on behalf of his father, Dhirubhai Ambani, who started Reliance with $1,000 and a dream, and made its growth and profits available to the common Indian through the stock market. According to Mukesh, Dhirubhai believed in two things: (1) investing in innovative business models and (2) trusting in the talent of young people, who in his opinion held the key to making things happen. Today, Reliance is India’s largest private sector company, 1 in every 4 Indians in the stock market own Reliance, and the average age of Reliance’s 100,000 person workforce is 29. 

Mukesh talked about the fact that “the world is, in fact, not flat; it is spiked.” Fifteen percent of the world’s people control over 80% of the wealth. In India, 5% of Indians enjoy the 9% growth in GDP, while 65% live in scarcity and 30% live in an even more withered state. “We cannot have islands of prosperity next to oceans of poverty and squalor,” he said, a theme that was echoed throughout the summit, with other business leaders stating the government alone should not be expected to address social issues, and that it is the private sector’s responsibility to build and create sustainable business models that take into account a more inclusive growth.

Inclusive growth is the basis of Acumen Fund’s work in raising philanthropic capital and investing it in entrepreneurs who provide basic goods and services (health, water, housing and renewable energy) to those who earn less than $4 a day. For example, Acumen Fund has invested in an ambulance company in Mumbai that employs an innovative cross-subsidization model of charging people based on the type of hospital they wish to go (thereby allowing higher-income customers to cover the costs of lower-income people) and in an international pharmacy chain that is expanding its focus to the lower-income peri-urban markets in Mumbai where people do not have access to basic clinic services and affordable drugs. These are two examples of innovative models that manage to serve this invisible market - making a difference in the lives of people who need these services – while running sustainable businesses.

I was inspired to see that this issue was foremost on the minds of at least a few of the business leaders present.  While the world is changing and awareness of these issues are being discussed, we need to accelerate the pace of change and translate discussion into action. I look forward to the day when measures around the number of “formerly-excluded-people-now-being-included” are as much a metric of a company’s success as where its stock price closes or its quarterly results.