Our understanding of Corporate Social Responsibility needs a paradigmic change. It has moved way beyond its philanthropic and community roots. It is today a way of doing business and needs to permeate across all departments, manufacturing, product development, business development, marketing, procurement, finance, human resources and so on. It is only through such integration that its true potential can be realized.

Poor should not be treated as the begging bowl of our economic system. They are an opportunity. 800 million poor of India represent one of the largest untapped consumer markets on this planet. Their combined economic power is greater than the economy of some sovereign nations. They are an immense source of innovation offering the biggest business opportunity of our times. Widening socio economic disparities since the advent of globalization are indicative of the lethargy of business innovation. The business should have a vested interest in thinking of revolutionary ways to remove the widening gap.

The greatest business challenge of our times is to draw the poor in to the market economy and reassure them that globalization will equally work for them. Corporate leaders like ITC, HLL and ICICI who have made a significant contribution in developing rural markets need to highlight business benefits of accessing the untapped poor markets. They should aggressively publicize the bottom line improvements so that more corporates are encouraged to adopt CSR as a business goal and not shy away assuming CSR is about giving handouts.

Oddly enough both poverty and global warming, the two most critical challenges of our times, have a common cure. It is in innovating products and services for the four billion poor making sure they are also eco-friendly and eco-efficient. The strategy is summed up in POISED (Poor Oriented Innovation for Sustainable and Eco-friendly Development) and can be achieved through eleven simple steps termed as PROACTIVATE: pricing non financial capital, radically increasing resource productivity, public private partnerships for innovating products for the poor, abolishing all subsidies, conserving natural resources, turning all products to services, introducing designs robust enough to stand heat, dust, humidity and mishandling but simple in skill levels, diversity in work force, mobilizing and activating women groups, transparency in governance and education for entrepreneurial skills.

Test of the progress is not whether we add more to the abundance of those who already have too much, it is whether we provide enough to those who have little. As Mahatma Gandhi said "the test of orderliness in a country is not the number of millionaires it owns, but the absence of starvation among its masses". People can live with poverty but cannot stand injustice. Disparity drives people to desperation. These disparities are a time bomb waiting to explode and pose the greatest threat to the security of business. This is specially true in India where 54% of the population is under 25. Most of the unemployed are under 30. The business should have a vested interest in thinking of revolutionary ways to remove the widening gap. Pricing natural capital can give immediate relief to the poor by transferring resources from urban rich to rural poor. This will make asset capital of the rural poor more realistic and help boost rural transformation.

Since global warming has become a reality, driving economy on consumer growth cannot be sustainable. We need to change our growth model. Conservationism, not consumerism should drive economic growth. On 8th December 1927, Mahatma Gandhi wrote in Young India "A time is coming when those who are in the mad rush today of multiplying their wants vainly thinking that they add to the real substance, real knowledge of the world, will retrace their steps and say: 'What have we done?'".

A saving grace of India's poverty is that India's environmental footprint is one-twelfth of US. Against 80 tonnes of natural material used by an average American, India's per capita material usage is under 7 tonnes (per person). The rabid rate at which consumerism is growing in India can eventually lead to ecological catastrophe. There is a complete lethargy in eco-innovation. We need to curb the proliferation of products and innovate products for multiple use. A cell phone is a classic example. It is not only a phone but also a camera, a watch, a radio & a TV. All this at a fraction of the cost and size.

Innovations are no longer following the traditional 'S' curve. The cycle time between the launch, its diffusion and maturity is shrinking turning 'S' curves into 'I' curves. Our planet is in danger of being cluttered up with half-baked products that leave customers half-longing and half-spoilt. There is an urgent need to move from products to services, from tangibles to intangibles and gear the economy upwards from acquisition mode to experiential mode, if we have to avoid the ecological disaster.

Transparent governance system is the key to CSR success. Poor may be capital poor but they are asset rich. It is the lack of transparency in contractual transactions that prevents them from unlocking their assets. Hermando de Soto the noted author of "The Mystery of Capital" estimated that the trapped resources of Mexico are $300 billion. India is bound to be higher. Besides, India's GDP based on purchasing power parity increases from half a trillion dollars to three trillion dollars, way ahead of UK. Poverty, therefore, is at least partially, a self-imposed problem in most of the world. FDI or philanthropy are but a mere fraction of the potential for capital-trapped in the country because of poor and opaque governance system. The primary face of private sector in most developing countries is the extra legal black market controlled by mafia, moneylenders, slum lords and strongmen.

Solutions to involve poor in the market economy have to be co-created through active partnership between government, NGOs and the business. Business has to be a major player. It is the business which is the biggest beneficiary of tapping the BOP- Bottom of the Pyramid, a term used by Prof. C K Prahlad for the poor. There are galore examples of how Hero Cycles, Reliance, ITC, HLL, ICICI Bank and Aravind Eye Hospital have improved their profitability by innovating processes to access this market. Hero cycles decimated the dominance of TI Cycles by designing cycles to take farm produce to the markets. Reliance mobile reached a million customers within 10 days of the launch. Studies have shown that return on capital employed on products innovated for poor markets such as Nirma was 121%. ICICI has 200,000 rural accounts managed by 16 managers through SHGs. In the case of Aravind Eye Hospital where only 40% are paying patients and the average charge for cataract surgery is $50 including stay, the return produced constantly has been of the order of 120-130%. In the case of e-Choupal, ITC has been able to get the payback on their PC Kiosks within one full season.

Poor do not need handouts. They need education and infrastructure. Developing rural markets by encouraging transparency in governance structures will unlock the hidden assets of the rural poor and accelerate their integration in the market economy. Business can fundamentally alter the rural landscape and stimulate commerce and development by bridging infrastructure gaps in rural areas, linking the informal economy to established markets and providing distribution channels and transaction platforms.

The government instead of spending Rs. 30,000 crore on poverty alleviation and proposing a further outlay of Rs. 30,000 crore on Employment Generation Scheme for 100 days per household will do better to divert this expenditure on health, education, roads, bridges & electricity and bridge the infrastructure gaps to link the informal poor economy with established markets. Guaranteeing jobs for 100 days is a mirage and a misutilisation of scarce resources but including the poor in market economy by upgrading infrastructure is a sustainable path to real prosperity. We are entering an era where there will be a lot of work but little employment. Our effort henceforth, should be to equip young people to become entrepreneurs. "Don't give them fish. Teach them how to fish instead".

The understanding of the way the new economy works is the key to our success. Its immense potential to transform society is tantalizing. In the new economy knowledge is the measure of wealth. Knowledge when shared benefits both sides. The degree of benefit is determined by the diversity between the parties. Greater the diversity more is the gain. This realisation can have a monumental impact on our geopolitical landscape. Societies divided today between classes, races, religions and regions can unite and reap the huge benefits from working together. This will signal the death of clannish and caste politics. As people realise that the value comes not from homogeneity but dissimilarity, the hatred based on religion and race will disappear. The case for affirmative action to increase diversity of workforce, therefore, has never been stronger.

Our main problem for far too long has been of posturing instead of practicing. We are being increasingly trained to become performers, adept in acting the part. Time has come to get real with the problems of poverty and ecological degradation. CSR is essentially the business contribution towards sustainable development. It cannot simply be a PR exercise. It is meaningless unless it becomes part of the core business. The urgency is not because social good is a competitive differentiator and part of innate human creed but that the alternative is anarchy where nothing but violence and terror will succeed. It was John F. Kennedy who said in his inaugural address back in 1961: "If we do not make a peaceful revolution possible we will only make a violent revolution inevitable".