As explained in our previous post, Source for Change seeks to create thousands of employment opportunities for rural women through business process outsourcing.
Our site visit to Source for Change sparked a debate within the group about the nature of social businesses. Is it possible for a purely commercial business model to maintain social impact as its top priority? Phillida Purvis, Director of LinksJapan, offers her insight here.
--
Bagar - a rural laboratory of change
Okay, so some background to begin with. Source for Change is one of several enterprises which have been incubated by the Piramal family’s Grassroots Development Laboratory. The Piramal’s great grandfather created the successful textile company, which has now diversified into health care, travel goods and real estate under the current generation and they wished to ‘give back’ in their home rural town of Bagar. They set up a charitable foundation and set out to tackle the problem of rural unemployment by providing start-up support for sustainable local initiatives with social impact.
Source for Change (SfC), which is primarily focused on the employment of rural women, is a rural Business Process Outsourcing organisation. BPO, we soon realised, is now a familiar term in India; here, it’s estimated that there is USD 10 – 12 billion worth of ‘offshore’ outsourcing of the data entry work of foreign companies, although domestic outsourcing is due to overtake this figure by 2015.
Opportunity rising
As the economy of India has grown dramatically, so has the urban job market. With no commensurate rise in employment possibilities in the villages, the lure of the cities in India, as in so many other countries, has proved compelling for hundreds of thousands of rural workers. But in very many cases it has proved a false siren song, leaving many urban poor, losing the battle against accommodation costs and urban price rises, worse off than they were in their village homes, where, in Rajasthan at least, water and electricity are subsidised by the state.
The IT revolution, the wiring up of rural Rajasthan, a relatively literate local population combined with the rising costs of outsourcing to the cities, has created an opportunity for Bagar which the Piramal thinkers have been quick to seize on. Serendipity brought the charismatic Biplab Saha their way and they gave him the job of setting up a local BPO, with local support from Shrot Katewa. Three years on and this initiative is flourishing and will soon become a fully fledged company. It began with low-end data entry contracts with an NGO, which quickly recognised that the work was actually done better, by the eager young local women of Bagar and its surrounds. This track record, and Biplab’s powers of persuasion, have helped to move SfC on to commercial sector contracts – starting with foreign companies who proved more easily persuaded that SfC could deliver the service than domestic companies.
We witnessed the clattering entry of Tata Telecom mobile phone contract data, outsourced by Karvy Data Management to Sources for Change. It was a leap in the dark for the CEO of Karvy and his staff. Their manager told me of his initial unease at the thought of unmade rural roads, no electricity and illiterate village folk, but he has been happily surprised by the speed and accuracy of the work, and is keen to continue the relationship, their first experience of outsourcing their own work. It is obviously a good financial deal for them.
The impact of employment
Talking to them about their work and their employer, I have no doubt from the employees that SfC, through its two centres, has social impact in the very local area, through their economic empowerment. As its CEO is keen to point out it is run purely as a business, albeit a values based one, which intends to expand, employing 100,000 in the next few years, which will spread that social impact. There is clearly tension between the social motivation of the investor, the Piramal Foundation, whose directors make their money elsewhere, and the CEO who needs to keep the business focus sharp. An example he gave was an argument over the original aim of employing women. To maximise the use of the dedicated broadband he introduced a second shift, from 5.00pm to 2.30am, which could not employ women, who need to get home before dark. He is even planning a ‘graveyard shift’ which will tip the balance in favour of male employees and move further from the donors’ original objective – but obviously contribute to profitability.
Does it actually matter that much if men also are given employment by SfC? Will this not also help local families and the rural economy? Has the pendulum in fact swung too far in favour of women’s issues, losing sight of the needs of men, who, after all, are still the primary breadwinners? The lives of a rural woman, balancing the running of the household, care of the children and, possibly, agricultural work, is incredibly tough, but she stays at home, in her community, whereas many men must travel for work, sometimes to cities, or even to other countries, such as in the Middle East, where their individual identity and personal dignity are of no account to others.
Biplab is a fair, and kind, employer. He is eager to get more commercial contracts in the bag because he wants to make a profit, but when he does he will definitely put all the employees, who are currently on a daily rate on to full time contracts, like the original fifteen women. But he wants this mostly because happy employees make better workers. He does claim that when SfC is generating huge profit, as he hopes it will, some of that profit will be donated to a foundation which will do more for the wider social needs of the employees – such as bussing them to hubs nearer their homes after their shift, but this may be at the insistence of the funder. So SfC is a social business, that may go one step further and find a mechanism for returning some profit to targeted social objectives.
The debate
Discussions with Biplab, on the long bus journey from Delhi, and over several meals at the Piramal Haveli and visits to his main SfC centre next door, provoked heated debate amongst the Journeys for Change travellers as to the ideal model that those who seek social impact should aspire to and support. Should it be social enterprise, or a model that some Indian social entrepreneurs seem to be aiming for, that is a socially responsible, even socially motivated, business that finds a mechanism for returning some profit to targeted social objectives?
Or should it simply be a business where there is social impact – on the assumption that small enterprises can never make a difference and only big business can achieve meaningful, scalable, sustainable impact and (and this is the critical point) attract significant investment in the way that social enterprise never will? Is it true that the market simply does not understand social enterprise, in spite of the best efforts of its stakeholders? After all the expectations of the social economy, must we, in the end, admit that it is only money that talks? I know where I stand in this debate, but it is ongoing, as I write, amongst our travellers, and across the world!
