The Big Bet Match-Up Initiative is supported by
The Big Bet Match-Up in Delhi is supported by
February 23, 2017 Morning session 09:00-12:30 Afternoon session 01:30-04:30 Reception 04:30-06:00 Venue Observer Research Foundation 20, Rouse Avenue Institutional Area, New Delhi, Delhi 110002, India Contact Morten Nyegaard Dalberg +45 22449436 morten.nyegaard@dalberg.com Mallika Kirti Dalberg +91 9205811694 mallika.kirti@dalberg.com
Welcome We are honored to invite you to participate in the Big Bets Match-Up Meeting, a series of meetings around the Big Bets initiative supported by the Rockefeller Foundation, and planned and executed in India by the Dalberg Group and the Observer Research Foundation. The event will take place on February 23, 2017 from 09.00 am to 04.30 pm, at the Observer Research Foundation, 20 Rouse Avenue Institutional Area, New Delhi-110002. We would be delighted to have you attend. This is the first of many Big Bet Match-Up Meetings around the world, which aims to source local solutions to local development challenges. In practice, the meeting will connect thought leaders, investors, entrepreneurs, philanthropists and civil society organizations to co-create impactful projects and ideas that can help elevate and achieve the Sustainable Development Goals (SDGs). We expect more than 40 practitioners and thought leaders from Water and Sanitation, Energy, Creative Manufacturing and Health sectors at the Meeting in Delhi. Together, we will share success stories, understand challenges in implementation, identify support systems and brainstorm and co-create new models that change the way we produce and distribute goods and services to underserved populations. The theme for the meeting is: Make in India‌ But how? Exploring the potential of distributed business models in achieving the Sustainable Development Goals. The success of AMUL, and more recently of distributed renewable energy enterprises, has demonstrated the positive impacts of promoting local, community-based production and distribution. This localization promotes regional development, allows services to reach new populations and offers a unique opportunity for equitable, inclusive and sustainable growth. At the Meeting, we are excited to explore ways to harness the potential of these models in meeting the SDGs. Given the innovative nature of your work in the development sector and its relevance to realising the SDGs, we believe your participation would be critical to furthering the conversation around the use of distributed models.
THE WORLD NEEDS BIG BETS
Why the world urgently needs Big Bets 2015 marked the successful termination of the Millennium Development Goals (MDGs) and the adoption of the Sustainable Development Goals (SDGs), the most ambitious project on which the international community has ever agreed. The SDGs consist of 17 goals and 169 targets, ranging from the pursuit of gender equality and quality education to climate action and promotion of inclusive societies. We have 14 years and limited resources to act upon these goals and create impact. The scale of the challenge is immense: • More than 800 million people still live in extreme poverty • 783 million people lack access to clean water • Almost 2.5 billion people lack access to adequate sanitation • In 2014, an average 42,500 people became refugees, asylum seekers, or were internally displaced every day • Inequality is staggering, as just 62 people own the same wealth as half the world • Only four in ten young women and men aged 15–24 were employed in 2015 • Global emissions of carbon dioxide have increased by over 50% since 1990 • And 57 million children of primary school age are out of school1 To achieve the SDGs, an estimated annual investment of US$ 3,900 billion is needed2. Based on the current levels of public and private investments in development, this leaves an annual investment gap of US$ 2,500 billion – 18 times more than the current level of official development assistance from donor governments. We believe that innovation, which begins with a disruptive idea, has the power to amplify existing resources and provide new avenues to achievement of the SDGs.
What is a Big Bet? Big Bets are the chances we take to breed transformative shifts; the creative ideas with which we push our thinking; the investments made in solutions to current and future challenges. A Big Bet might be unrealistic or naïve, but it helps us expand our potential range of solutions. Ultimately, Big Bets are what cause progress and change - even when challenges seem insurmountable. Whether we speak of Norman Borlaug’s Green Revolution, Nikola Tesla’s invention of alternating current or TimBerner Lee’s development of the World Wide Web – transformative ideas have been vital in driving human development forward.
How Match-Up Meetings bring Big Bets to life The Big Bet Match-Up Meetings constitute a series of innovation summits that take place in selected hot spots around the world. At the Meetings, we aspire to create fertile ground for new ideas that can change the way we think of global development and contribute to the SDGs. To do so, each Big Bet Match-Up Meeting identifies a theme and a set of local challenges, identifies and sources local solutions from local innovators and entrepreneurs, and convenes a variety of innovative and entrepreneurial stakeholders to co-create and build new partnerships around concrete solutions to local SDG-challenges.
The Delhi Match-up The Big Bet Match-up Meeting in Delhi will explore the potential of distributed business models of production and service delivery as an overarching response to some of the most pressing SDG-challenges India is facing. To allow us to have a deeper conversation, we will specifically explore at the meeting how distributed models can be applied within I) water and sanitation, II) energy, III) creative manufacturing and IV) health. The aim, however, is to kick-start a conversation on the role distributed models have across a broader set of economic activities. We have invited the most innovative entrepreneurs, knowledgeable experts, progressive investors and philanthropists from each sector with the aims of bringing disruptive change to India’s ambitions of meeting the SDGs. The objectives of the meeting is three-fold: (a) Identify, showcase and improve solutions that support distributed models. (b) Foster untraditional partnerships that support implementation (c) Create local and regional awareness on the SDG agenda. Participant personas invited to the meeting are social business, civil society organizations, impact investment and incubation organizations, experts, philanthropic foundations and government stakeholders
The Local Challenge India’s economic architecture favors centralization of service delivery and concentration of modes of production In July 2012, three regional power grids failed in India and plunged more than 700 million people in darkness. Northern and Eastern India came to a stand-still for two days: trains failed, traffic signals went out, surgical procedures were cancelled.3 Much has been written about the reasons for this failure, technical and political alike. At the heart of the failure however, lies a phenomenon that spreads beyond the power sector and consistently creates challenges all over India: an economic architecture that favors (a) centralization in service delivery, and (b) concentration of modes of production. Much of the country relies on the public sector for electricity, healthcare, education, sanitation and other essential services. This service delivery is characterized by an over-reliance on the center for fiscal support and key decision-making. In the private sector, the tilt towards large-scale industries concentrates ownership and wealth.
This excessive centralization and concentration has four key limitations: 1) It is not inclusive: By the time the services travel down the centralized chain, they are either diluted or do not reach those on the periphery. An example of this is the inability of a regional grid to service remote or sparsely-populated regions. 2) It is not resilient: A few nodes of service-delivery are highly vulnerable to external disruptions (as seen during the blackout in 2012) and corruption. Transparency International has consistently rated India low on its Corruption Perception Index.4 3) It is not equitable: The well-accepted assumption that large-scale industries result in extensive job creation is increasingly proving false due to automation, which substitutes labor with capital. As economic growth outstrips employment creation, the inequity inherent in such business models is deepened. India’s GINI coefficient (which rose from 45 in 1990 to 51 in 2013) is testament to this inequity.5 4) It is not environmentally sustainable: If developing countries follow the same industrialized path to development as high-income, western nations, the world would need the resources of two planet earths by 2050.6
If unchecked, these challenges hold significant consequences By 2040, 70% of India’s population will be part of the work force. If absorbed gainfully into the workforce, they will empower themselves and leapfrog India to prosperity. Automation, however, threatens India’s ability create these jobs—according to the World Bank, 69% of jobs in India are vulnerable to automation.7 Faced with millions of additional unemployed or under-employed people, the existing challenges in service delivery will amplify. The already burdened economic infrastructure will sag under the pressure of meeting their needs, and the demographic, instead of yielding a dividend, will turn into a liability. If India is to create prosperity for all and meet the SDGs, its economic infrastructure urgently needs to be redesigned. It needs an infrastructure that can yield value in all parts of the country: an infrastructure that supports many types of business models, empowers end users to be the generators of services in their communities, and creates jobs across the country. In short, it needs an infrastructure that supports the spread or distribution of production and service delivery centers.
The Big Bet: Distributed Business Models of manufacturing and service delivery A distributed model is defined by the regional spread of its supply chain What are the defining features of business models that drive distribution? What type of economic infrastructure is required? The rest of this document will answer the first question, while the second question will form the basis of discussions during the Match-up Meeting. For the rest of this document, we refer to these business models as “distributed models of production or service delivery” or simply as “distributed models.” A distributed model is one that engages a community in the production of goods or services by leveraging technology, a common resource, or an indigenous skill-set. Typically, the engaged communities are underserved or located in remote regions. A distributed model creates jobs in non-traditional locations, connects communities to new markets or brings new services to them, in turn fostering regional development. This engagement can occur at various points in the business model’s supply chain structure. For example, FabIndia relies on indigenous artisans to create its primary product. Swasthya Slate, a portable diagnostic device, developed by Dr. Kanav Kahol at the Public Health Foundation of India, allows community clinics to engage with local populations more effectively in Delhi, parts of Punjab and Jammu & Kashmir. Digital Green engages with agricultural communities in rural areas to both create and disseminate educational videos. While these business models differ in their points and forms of engagement with local communities, they offer similar benefits. We refer to this entire spectrum as “distributed models.”
Types of distribution
Distributed models amplify existing resources and empower communities to meet challenges Distributed models offer social and environmental benefits than can offset the limitations of centralization and concentration: 1) They create jobs locally: Distributed models engage in diverse communities across diverse locations, spreading the nature and location of jobs created. These jobs are not as vulnerable to automation as a job in a large factory. In fact, the unique selling point of many of these models, particularly in manufacturing, is that their products are not machine-made. 2) They are inclusive: Since distributed models are not dependent solely on economies of scale for viability, they do not need to rely on large-scale infrastructure and can bring services to remote populations. For example, a grid may not service a remote village in U.P., but a business installing solar home systems will. 3) They diversify options for the end user: Distributed models open multiple market places or avenues for services. A village person need not rely only on one large hospital in the nearest town for health services but can access a network of community health workers empowered by a distributed model.
4) They are agile: Communities can deploy highly precise and timely solutions in the face of external disruptions given their familiarity with the operations and contexts of the model. 5) They are environmentally sustainable: Many of these models, particularly in manufacturing, source materials that are locally available and environmentally friendly. For example, Husk Power, a mini-grid utility company in Bihar uses rice husk to generate electricity. Additionally, since the end-users is often geographically close to the source of production, it enables them to see any negative externalities and are incentivized to address it (given that he/she is directly affected by it). Distributed models unlock or amplify existing resources to meet the needs of communities. They equip communities to empower themselves. Our hypothesis builds on this insight and argues that business models, which leverage local communities to produce goods or services when supported systematically, hold the power to meet the SDGs.
India is well poised to incubate distributed models due to three factors 1) India can leapfrog incumbent centralized models as it is still designing its economic infrastructure: India’s service sector is among the fastest growing in the world (second only to China).8 It has the opportunity to nurture new areas of growth (such as tourism and healthcare), in a way that augments economic growth with more and better jobs, inclusive service delivery and environmentally sustainable practices. 2) It already has the blueprint for this infrastructur: For example, the anganwadi centres, set up as part of the Integrated Child Development Services, rely on local community members to provide basic healthcare in Indian villages. They demonstrate an example of a skeletal system in the public sector upon which civil society organizations and social businesses can build to fortify health services in the remotest parts of the country. 3) The definition of economic viability is changing: Technology is driving down costs and replacing scale as a key criteria for determining profitability. As people become increasingly concerned about ethics and the environment, consumer preferences are changing. Distributed models are more ‘ethical’ and environmentally sustainable and hence, are well positioned to meet changing consumer preferences.
The risks posed by these models raise important questions around their adoptability These models may work well in small communities but their scalability or adaptability is yet to be proven. We could end up with an ecosystem of disaggregated, disconnected models tackling a broad challenge in an ad-hoc manner. Such disaggregation in turn would hinder pooling and leveraging all resources within a sector. It could additionally prevent stringent quality control checks. Thus, before embarking on a wide rewiring, the Match Up meeting seeks to address the following key questions: How can we create order and network disaggregated models working across the country? How do we create an ecosystem that allows distributed models to emerge, connect and deliver local solutions at scale, with speed and sustainably?
Agenda
09.00 – 09.50
Registration and Coffee
09.50 – 10.00
Introduction to the day by ORF and Dalberg Global Development Advisors
10.00 – 10.45
Plenary 1: Too Big to Fail: What India must do to achieve the SDGs moderated by Ashok Malik, ORF
10.45 – 11.15
Plenary 2: The Power of Distributed Models: Introduction to the theme by Dalberg Global Development Advisors
11.15 - 12.00
Plenary 3: Tales from the field: Learnings from Distributed Models by moderated by Mihir S Sharma, ORF
12.00 - 12.30
Plenary 4: Introduction to Societal Platforms by Sanjay Purohit, Scale Advisor, Ek Step Foundation
12.30 - 01.30
Lunch
01.30 - 02.45
Session 1: Speed, Scale and Sustainability: Creating an ecosystem for success (I) led by ORF, Ek Step Foundation and Dalberg Global Development Advisors
02.45 - 04.00
Session 2: Speed, Scale and Sustainability: Creating an ecosystem for success (II) led by Sanjay Purohit, Scale Advisor, Ek Step Foundation
04.00 - 06.00
Closing reflections followed by reception
Workshop in groups Working under the umbrella of distributed models of service delivery, the participants are divided into four groups. The participants will consist of a mix of personas— entrepreneurs, company representatives, civil society organizations, technical experts and executive partners. Each group will work with one of four themes--water and sanitation, energy, health and creative manufacturing - and co-create a number of concrete solutions that address the specific theme. Facilitators will support the ideation and co-creation process to elevate and further develop ideas put forward by participants. One the following pages is an overview of the four working group and the invited participants. As participants invited to contribute cross-cuttingly are: Bill & Melinda Gates Foundation, U.S. Treasury, Tata Trust, Unltd India, T-Hub, Lok Capital, Acumen India, Ministry of Rural Development, TARU, Innovation Center Denmark in India, Deshpande Foundation, World Bank Group, Barefoot College.
Group 1
WATER & SANITATION Context The lack of adequate water and sanitation facilities is one of the most pressing issues India faces. More than half a billion people defecate in the open in India.9 This shortage has negative health repercussions: WHO estimates that around half of malnutrition cases are associated with diarrhea or intestinal worm infections from unsafe water, poor sanitation or hygiene.10 Innovative solutions in this field that can be implemented locally would help achieve the SDGs. Key questions 1) What models support behavioral change, and how can they be supported? 2) What other models have shown success? 3) How can they be scaled?
Group 2
ENERGY Context At least 300 million people in India live without electricity. Another quarter-billion only have access to power from India’s grid 3-4 hours a day. Even though green reforms have been approved, almost 70 percent of India’s electricity today comes from coal-fire plants, 17 percent from hydropower and 3.5 percent from nuclear power, which leaves about 10 percent coming from renewables.11 Renewable, innovative solutions that can bring electricity to rural India are both extremely important to the marginalized in India and to the sustainability of our earth. Key questions 1) Renewable power generation is often dependent on the climate and weather conditions. What are the best practices to ensure that decentralized renewable energy sources are unaffected by random meteorological fluctuations? 2) How can the necessary knowledge transfer for installation, operation and maintenance of decentralized renewable energy sources be facilitated to the end users of the product? 3) Given the initial investment levels and risks that are associated with establishing renewable energy products in emerging economies, how can the risk/reward metric be made attractive enough for large scale adoption?
Group 3
CREATIVE MANUFACTURING Context The manufacturing sector in India is generating 16 % of India’s GDP, but has a significantly lower productivity than other emerging economies in China and Brazil is 1.6 and 2.9 times higher (PPP).12 The primary cause of low productivity is that manufacturing firms with less than 10 employees account for a majority of employment in the sector. The small companies have weak access to export markets, and the informality that comes with small enterprises implies that many workers stand outside labor market regulation and social protection schemes, resulting in higher inequality.13 There is a large potential to raise wages and living standards for a measurable share of the population, if innovative solutions improving the sector’s exports and/or organization can be identified. Key question How can small enterprises be supported to systematize all parts of the manufacturing sector and amplify impact? Group 4
HEALTH Context There is a stark inequality in access to health care. A large population in rural areas has extremely limited access to medical care. Only a small minority of the population has a health insurance, with the rest relying on high out-of-pocket expenditures for treatment. In rural areas, a large proportion relies on homeopathic or cultural remedies in their treatment. Having the highest percentage of underweight people in the world, and struggling severely with malaria, tuberculosis, and diarrhea, innovations that can improve access, knowledge or treatment are in high demand. Key questions 1) Many successful models have opted for innovative financial strategies, such as cross-subsidization, to provide sustainable affordable care. What strategies must business models adopt to address issues of financial access while ensuring quality services at the bottom of the pyramid? 2) Effective outreach is, for instance, essential to comprehensive rural health service delivery. How can innovative service delivery models plug physical access gaps in underserved areas? 3) Certain policies help nurture innovation – decentralized accountability can, for instance, help address fluctuations caused by election cycles. What are the enabling conditions required to incentivize healthcare innovations?
Sources 1) OECD, 2015; UNWater.org, 2013; UNHCR, 2014; Oxfam, An Economy for the 1%, 2016; Un.org: http://www. un.org/millenniumgoals/poverty.shtml; MDG Progress Report, 2015 2) UNCTAD. (2015), World Investment report 2014. Retrieved from http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=937 3) Pidd, H. (2012, July 31). India blackouts leave 700 million without power. The Guardian. Retrieved from https://www.theguardian.com/world/2012/jul/31/india-blackout-electricity-power-cuts 4) India’s score: 40/100; Rank 79/176. Transparency International. (2016). Corruption Perception Index. Retrieved February 13, 2017, from http://www.transparency.org/country#IND 5) Nair, R. (2016, May 04). IMF warns of growing inequality in India and China. Live Mint. Retrieved from http:// www.livemint.com/Politics/mTf8d5oOqzMwavzaGy4yMN/IMF-warns-of-growing-inequality-in-India-and-China. html 6) Burke, J. and Mark Townsend. (2002, July 7). Earth ‘will expire by 2050’. The Guardian. Retrieved from https:// www.theguardian.com/uk/2002/jul/07/research.waste 7) World Bank. 2016. World Development Report 2016: Digital Dividends. Washington, DC: World Bank. doi:10.1596/978-1-4648-0671-1. License: Creative Commons Attribution CC BY 3.0 IGO 8) Bhargava, Y. (2014, July 09). India has second fastest growing services sector. The Hindu. Retrieved form http://www.thehindu.com/business/budget/india-has-second-fastest-growing-services-sector/article6193500. ece 9) Cherukupalli, A. (2016, November 18). Open defecation in India: forcing people to stop is not the solution. The Guardian. Retrieved from https://www.theguardian.com/global-development-professionals-network/2016/ nov/18/open-defecation-india-solution-world-toilet-day 10) Worley, H. (2014). Water, Sanitation, Hygiene, and Malnutrition in India. Population Reference Bureau. Retrieved from http://www.prb.org/Publications/Articles/2014/india-sanitation-malnutrition.aspx 11) Martin, R. (2015, October 7). India’s Energy Crisis. MIT Technology Review. Retrieved from https://www. technologyreview.com/s/542091/indias-energy-crisis/ 12) Ghani, E., W. Kerr and A. Segura. (2015, June 09). Informal tradables and the employment growth of Indian manufacturing. VOX CEPR’s Policy Portal. Retrieved from http://voxeu.org/article/employment-growth-indian-manufacturing 13) Joumard, I., U. Sila and H. Morgavi (2015), ”Challenges and Opportunities of India’s Manufacturing Sector”, OECD Economics Department Working Papers, No. 1183, OECD Publishing, Paris. Retrieved from: http://www.oecd-ilibrary.org/economics/challenges-and-opportunities-of-india-s-manufacturing-sector_5js7t9q14m0q-en
Join the conversation We invite you to use #BigBets2030 prior to and during the meeting to talk about your project and why it is important for the realization of the SDGs.
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About the Big Bets Match-up Meeting The Big Bets Match-up Meetings are designed to identify and drive transformative ideas and Big Bets that are transformational for the SDG-agenda. The meetings take place in selected cities around the world and aim at fueling great minds and ideas. To create the most inspiring forum for idea generation, we will gather the most important thinkers, ideas, entrepreneurs, foundations and experts in a creative work process using their competencies complementarily in a highly curated ideation- and co-creation process. Since the global ambitions for development exceed the allocated funding, new-thinking and creativity are highly needed. The SDG-agenda is the most ambitious plan for global development on which the international society has ever agreed on. We must leverage all brains and ideas available to make our world the prosperous place it is planned to be. The process will not only ensure identification and crowd-sourcing of innovations and ideas, but also cocreation and curation of new ideas, partnerships and projects. The goal of each meeting is to identify and refine entrepreneurs’ ideas in a match-up between experts, philanthropists, investors and civil society organizations by creating new partnerships and ideas. The expected concrete output is a thorough investigation of the thematic drivers’ ability to help address the SDG-agenda in innovative ways and specifically to set up new project partnerships, bring new ideas to life and/or improve or scale existing ideas. To help realization of the top ideas, the secretariat will help to create fruitful partnerships and move the idea further.