Monday, October 18, 2010

Visions: What limits us?

- Rohan Pai, PGHR 2010-12

This was the million dollar question that came up in our strategy class, thanks to the thought provoking session by our Business Strategy Formulation Professor, Dr. Harsh W Mishra. The question became even more interesting when the vision – ‘A World without Poverty’ - was discussed. When we were asked to imagine what such a world would be like, many of us expressed it as being “idealistic”, “utopian” or “difficult to imagine”. Of course we would like to live in such a world but given the economic, social and political scenarios prevailing today we find it hard to imagine such a world. It is not that our vision is limited but that we looked at the issue from a practical point of view.

Many questions blur our vision as we think of a world without poverty: Are there enough resources to fulfill this vision? Will there ever be equitable distribution of resources? Is the inherent selfishness of businesses the hindrance? Even if we close in on attaining the vision, will it be sustainable?

Let us consider the question on sufficiency of resources. The major hindrance we face in this regard is that growing population will keep demanding more and more resources and greater the population growth, more the probability that there will be a section of society that is not able to get enough. Consider that few decades ago we had a clear divide in the rural and urban India. But today the divide has reduced to the extent that people from rural India have migrated to the urban or more developed areas and many of these families are much better off than they were few decades ago. Similarly growth and development has percolated to many rural areas and many of these are experiencing a better standard of living. However, a majority of our population still lives below the poverty line because both the urban and rural population grew uncontrollably and the allocated resources didn’t reach all of them. So, concrete steps need to be taken on planning and creating mass awareness, especially at the bottom of the pyramid. Providing necessary control measures to check population growth will benefit all.

Next, the question was on equitable distribution of resources and the inherent selfishness of businesses. It is imperative that there has to be a collective effort on CSR as efforts and benevolence of individual personalities and firms would neither be all pervading nor a long term solution. Also what we need to understand is that the basic concept of the market is that the businesses out of their own selfish motives allocate and utilise resources efficiently for their own benefit and the output ultimately benefits not only them but also the economy. This is what economists call ‘the invisible hand’ guiding the process. The inherent selfishness of business might not be all that is to be blamed as it has provided growth to the private sector and ultimately the economy, without which there would have been much less growth, employment, output and many more poor people. So the Microsoft vision of ‘a PC in every home running Microsoft’ might be motivated by profit but it has benefited people and businesses worldwide.

The requisite growth has been achieved by our economy but have the generated resources over the years been utilised efficiently and have all of the resources allocated on social development actually reached where they were supposed to?

The next big question is about the sustainability of the vision. If the needs of all the poor are fulfilled and they are provided the basic food, clothing and shelter, will it be sustainable, considering the strain on the economies and the resources? Probably not. Just satisfying the needs of the poor is a short-term solution. Allocating a larger proportion of social development resources to empowering an increasing proportion of the needy to earn on their own through local employment or what we know as ‘dhanda’ might be a long term solution. And one day we might be able to envision ‘A World without Poverty’ without many doubts.

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