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.

TATA Nano : is it Social Entrepreneurship?

I am just back from India after a two month stay touring all sorts of places – and I have decided India is two (at least two) parallel universes – intertwined but unconnected….and maybe just maybe…. The TATA Nano will provide a connection – and that’s social entrepreneurship- at least in the India context.

New Market: The Nano (the people’s car) target market is the 4 person family who cannot afford a car today - so along with folks in the large cities who can afford the SUVs– there will be a big rural demand for this car – i.e. a whole new market will be opened and a productivity and lifestyle improvement created that will benefit the India economy – and that means the global economy. This is the point critics of the Nano in India are missing as they envision choked (as if they can get any more choked) city streets.

Eco-friendly: The green-guys are missing the point that the Nano is pretty eco-friendly car (better mileage than Prius, same emisions as a scooter). If Tata can make enough Nanos to enter the export market and replace just the SUVs in Californmia that will take care of the added "Nano footprint".

Innovation: I believe it will spur innovation in the “green-car” space through competition – witness the announcements by almost all major car companies to do something including Ford. Since gas in India is almost twice what it costs in the US and the car is being sold to those who cannot really afford the gas – green alternatives will be developed – there is already talk of the e-nano and India does have the technology – witness the Reva electric car at Rs. 4 lakhs – catering mainly to the export market.

I used to be in the "Nano-is-disaster" camp but after being on the ground -in the target market for the car where it is the realization of a dream - I am a convert. I just hope TATA can make it to keep up with demand and it does not end up in the black market.

Check out the article Nano- hypocrisy below:
http://www.worldwatch.org/node/5579
"Social Entrepreneurship will be no different from "core business" as the TATA Nano will demonstrate." says Gerardo Rego. I agree.