Bhalchanda Vishwanath, CEO and Founder of United Prosperity, recently interviewed Nandan Nilekani, author of Imagining India – Ideas for the new century on their blog. Nandan is the Co-Chairman and Co-Founder of Infosys Technologies. He was Forbes “Businessman of the Year” for Asia in 2007. Most recently, he was nominated to the list of 100 most influential people in the world by Time magazine. Nandan’s wife, Rohini, was one of the four Indians names on Forbes 48 Heroes of Philanthropy in Asia. Below is an excerpt of the interview:
Bhalchander: ….. In his recent book, Creating a World without Poverty – Social Business and the Future of Capitalism, Nobel Laureate Prof. Muhammad Yunus talks of a new form of business – social business. In Prof. Yunus’s own words: “A social business is not a charity. It is a non-loss, non-dividend company with a social objective. It aims to maximize the positive impact on society while earning enough to cover its costs, and, if possible, generate a surplus to help the business grow. The owner never intends to take any profit for himself.” What are your thoughts on social business? Can a wave of social businesses as Prof. Yunus envisions help solve some of the pressing challenges India faces?
Nandan Nilekani: From what I’ve seen, some NGOs that work in India do function as ’social businesses’. That said, I think too many of us indiscriminately tar the idea of ‘profit’ being bad for the social sector. Its good for all kinds of organizations to create surplus for a rainy day. Two organizations that made a huge difference to poverty in India were the Rockefeller and Ford Foundations – they financed the research efforts that led to the Green Revolution. Their money came from corporate profit. The Bill and Melinda Gates Foundation is now doing some incredible work in Africa. We can’t diminish such efforts because they were funded by corporate profit.
And for better or for worse, more people are motivated by profit than by philanthropy. The question is whether such for-profit efforts are effective in the social sector, and from what I’ve seen, I would say yes – paired with sensible regulation, it helps bring excellence to the forefront in the social sector. In India, businesses targeted at the poor have managed to deliver them low-cost services more effectively than some NGOs. Arvind Eye Hospital specializes in low-cost eye operations for the poor. For-profit micro-finance institutions are doing remarkably well in Tamil Nadu and Karnataka.