Somewhere in the world today, a person is dedicating his or her life to a pressing social or political injustice that they believe must be corrected. They will fight discrimination, create solutions for clean drinking water, or push for legislation to provide quality education to young people. They will be inspired by Mahatma Gandhi, but read from the playbook of CK Prahalad and develop a business model like Muhammad Yunus.
On October 2, 2019, the world will celebrate the 150th anniversary of the birth of Mahatma Gandhi. Over the course of his life, Gandhi led multiple social and political movements across, what is today, twelve nations in Africa and South Asia. He also became the role model for the most successful political movement leaders of the 20th century – from Martin Luther King to Lech Walesa, Cesar Chavez and Nelson Mandela. More so than any individual in modern history, Gandhi was able to build an organization and mobilize tens of millions of people in the fight for independence and equality.
Fifteen years ago, Dr. CK Prahalad’s ground-breaking book, “The Fortune at the Bottom of the Pyramid”, called on the private sector to look at the poor – in rural areas and urban slums, as potential customers and apply the principals of innovation, R&D, pricing and supply chain management to sell them products and services that would also improve the quality of their lives. Prahalad advocated that if multinationals and entrepreneurs could figure out how to sell food, medicine and quality housing at prices the poor could afford, they would create 3 billion potential new customers in the developing world.
The subsequent award of the 2006 Nobel Peace Prize to Muhammad Yunus, founder of the Grameen Bank of Bangladesh for his leadership in the field of microfinance proved that this strategy was not just academic, but could be globally transformational in less than a generation. Today, microfinance is a mainstay of banking and finance among NGOs, multinational banks and fintech entrepreneurs in much of the world, including the United States.
Ironically, it also uncovered a surprise reality – that the businesses embracing Dr. Prahalad’s strategy were not global multinationals, but entrepreneurs and innovators driven by mission. An ecosystem had arisen to bring new business models, products and services to the poorest corners of Earth that included entrepreneurs, researchers, innovations, venture capitalists and impact investors. Today, more than 50% of millennial's worldwide want to start their own company, NGO, or social enterprise according to research from the US Council of Economic Advisors. A stroll through any of the world’s leading entrepreneurial programs – in India, the United States, Europe or Africa will reveal a growing number of entrepreneurs in sectors like agriculture, financial services for the base of the pyramid, public health, education and sustainability. These organizations are mission-driven, far more than they are profit-driven.
There are many reasons that young social entrepreneurs, activists and leaders look to Mahatma Gandhi as their model. The common thread is, like Gandhi, they are taking a new approach – an entrepreneurial approach, to address a glaring injustice or solve a problem.
Mahatma Gandhi organized his life, and his leadership, around a series of personal values and commitments that never wavered. His lifelong commitment to freedom, equality, diversity and economic empowerment manifested themselves through his own personal beliefs and behavior, and through the clarity with which he defined those values to be part of the Independence movement and other just causes. While they are extraordinarily difficult to replicate, particularly over a life time, they are easier to model as a framework for one’s own life. Among figures in contemporary history, the simplicity of Gandhi’s principles and consistency with which he applied them remains one of the best models of leadership for any aspiring change maker to follow.
Worldwide, change makers and mission-driven entrepreneurs have recognized that, to a certain extent, there is little difference between a for-profit company and a non-governmental organization. If someone can deliver healthy toothpaste to a farmer and his family in rural India at an affordable price, we should not care whether they are for-profit or non-profit. And if they can scale their solution rapidly with private capital, then by all means they should. The insights of Prahalad and Yunus’ experience quickly made the for-profit entrepreneur equal to the political activist and NGO founder as a change-maker.
It is fair to question whether this recent embrace of business models has actually led to improved outcomes for the poor. The growth of microfinance speaks to this quandary. Study after study has shown that microloans do not lift people from poverty, nor do they change the economic standing of communities. But everyone in the world needs access to credit, and microfinance has brought formal banking to places that did not have it before. It has also brought those services much faster than NGOs and governments could have ever dreamed to.
The world has certainly changed a lot since Gandhi’s death in 1948. The idea of equating entrepreneur with the type of change Gandhi was advocating was unheard of until recently. Gandhian economics was socialist in nature – focused on rural empowerment, the protection and celebration of rural industries like weaving and handicrafts, and an emphasis on self-reliance and self-sufficiency. He was skeptical of science, technology and industrialization, and worried about its impact on India, where the majority still live in rural and semi-rural areas. It is not surprising then, that change makers began looking for new models that reflected the world they live in – one driven by science, technology, connectivity, globalization and access to relatively cheap and abundant capital.
The historical record is clear – since India’s independence in 1947, those movements that embraced non-violence and social empowerment have been far more successful than violent, revolutionary movements in creating stable, prosperous and inclusive nations and societies. While no society, including India, has perfectly embodied Gandhi’s vision, he provided a toolkit and road map that has more widespread applicability than those of a military revolutionary or a nation-building leader.
