Harvard Business School professor and an expert on competitive strategy says economic development and social development go hand in hand and one should boost the other
New Delhi: Compared with other countries with similar gross domestic product (GDP) numbers, India is underperforming on social progress, according to Michael E. Porter, professor at Harvard Business School and an expert on competitive strategy.
“The social progress in India is less than you would expect, given the level of average income per person in the country. I do take it into consideration that it’s a complex country with lots of states and city level, but these indicators do give an important perspective," Porter said.
Porter was speaking at the Porter Prize 2014 organized by the India Council on Competitiveness.
According to Porter, while corporate social responsibility (CSR) initiatives and philanthropy are important effects of business on society, they are not the most important effect of business on society.
“The way business effects society most is through business. These include the way we produce, the raw materials we use and the way we create and put together better infrastructure in communities we do business in," he added.
Porter emphasized economic development and social development go hand in hand and one should boost the other. Economic development is boosted through macroeconomic factors like competitiveness, monetary fiscal policy and broader policies and micro-economic factors like quality of business environment, capabilities of companies and building clusters (like a cluster of firms in certain geographical regions for sectors like life sciences).
Panel discussions held at the day-long event attended by industry leaders explored creating shared value, policy which would boost competitiveness and growth, and the importance of enabling industrial development among other issues.
Shashi Ruia, chairman of Essar Group, in a keynote address, emphasized on challenges of forming a long-term strategy in India, looking at the recent development of the Supreme Court cancelling coal allocations for all companies except four.
“In a country like ours no matter how much strategy you work on, there are regulatory challenges and uncertain policy environment which are critical. However, I am optimistic about investments in this country because of our current prime minister. I believe Gujarat is the easiest place to do business in India and our highest investment in this country is in that state. In him we have a leader who will take decisions that will drive business and growth," Ruia said.
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