Sunday, October 5, 2008

TATA Nano, Singur and Social Entrepreneurship

TATA having to pull out of Singur actually has a plus side to it.
It so happens that when TATA fist announced the Nano car (Rs. 1 lakh), I was in India and I authored my most popular (to date) blog page called TATA Nano- Is It Social Entrepreneurship? And now I am in India again when TATA is announcing its pullout from West Bengal (Singur). TATA will relocate its Nano factory to another state in India.
The media is abuzz and Gurcharan Das (an author I admire immensely) has written an article in Times of India called "When Everyone Lost". My view is different. I think this is a battle lost that will win a war. From an economics perspective, yes - everyone lost. But if you think of Nano as a social enterprise, much social value has been created.

The Singur pullout proves my point - that social entrepreneurship - defined as social as well as economic impact - is really difficult. The big win here is that this factory relocation, has engendered an open conversation: who has the best interests of the people at heart? There is data available (increase in number of savings accounts, people trained for new jobs ..) that in one year the Nano plant has already had positive economic impact on life in Singur. As other states line up to offer the best deal to TATA, hopefully the destitute landowners of Singur (ultimately they must benefit) will start thinking for themselves rather than listening to vested political interests and that is a social change that cannot be undone.
So, I hope that TATA will still get the Nano out on schedule and this relocation, while admittedly an economic bump in the road, will prove to be of immeasurable social value in educating India about creating social impact through business methods - the "double bottom line". Next time the people in Singur get a deal like the Nano, they will think twice before agitating. In fact, Ratan Tata was most impressive (I saw this on TV) when he calmly mentioned that West Bengal will be considered for the second Nano plant. West Bengal's short term economic loss is immediate benefit for some other state (evidenced by the offers).
Now that is thinking long term, thinking social entrepreneurship.

3 comments:

A G N I said...

The unveiling of the much hyped “People’s Car” – Nano was being eagerly awaited not just in India but by the whole world.
Just a few days before the Puja, Tatas have decided to relocate their project from Singur to Sanand in Gujarat, which has come as a rude shock to the people of Singur. It was expected that in spite of the announcement to move out of Singur, Tatas would consider to stay and continue. But the political scenario has impacted the decision to go ahead with the production.
In short NANO wont roll out of Singur.
What should be called? – A true entrepreneurship?
Just looking at the fact how the socialism and the capitalism has played a role in this let me clarify
Under socialism a ruling class of intellectuals, bureaucrats and social planners decide what people want or what is good for society and then use the coercive power of the State to regulate, tax, and redistribute the wealth of those who work for a living. In other words, socialism is a form of legalized theft.
Capitalism is the only social system that rewards merit, ability and achievement. It rewards virtue and punishes vice - applies to both the business executive and the farmer, the lawyer and the factory worker.
The entrepreneur is with unlimited drive, initiative, insight, energy, daring creativity, optimism and ingenuity. The entrepreneur is the one who sees in every field a potential garden,(greenery) in every seed of a fruit. He is the man of the mind.
Tata knows very well that the free-enterprise system is not possible without the sanctity of private property, the freedom of contract, free trade and the rule of law. Therefore they have valued over all others freedom to experiment, invent and produce.
There has to be a moral revolution in this country. We must rediscover and then teach our young the virtues associated with being free and independent citizens. Then and only then, will there be social justice.

Anonymous said...

After the violence in Singur as well as the death of Lalit Kishore Choudhary, Tata made the right move and left.

For Singur to develop past subsistence farming, they need industry. The way to develop industry is through a predictable regulation and taxation regime that rewards the company for bringing jobs. Violent protests and murder is NOT the way.

I read a great article titled “Tata says ‘tata’ to Singur” at http://economicefficiency.blogspot.com/2008/10/tata-motors-says-tata-to-singur.html that really spells it out.

Tata Nano said...

I foresee a great future to Tata Nano. It has just launched and the interest has been hugee