Submitted By: Pratibha Saini Roll No.

- 74

Building Socially Sustainable Businesses

Term Paper 2 : Identifying Opportunities for Socially Sustainable Business arising out of Paradigm Change in Development Planning

Introduction Economic Growth and Development in China and India Both China and India have also made great strides in economic growth and development in recent years. In each country, rapid economic development has led to widespread improvement in living standards and quality of life and lifted hundreds of millions of people out of poverty. The UNDPs Human Development Index (HDI) accounts for three fundamental components of development and living standards: income, education and health. From 1980 to 2010, Chinas human development index (HDI) rose by 80 percent from 0.368 to 0.663. Over the same period, Indias HDI increased by 62 percent from 0.320 to 0.519. In comparison to all other developing countries including fellow BRICs Brazil and Russia, China and India rank 4th and 6th respectively in the list of countries with the largest HDI increases from 1980 to 2010. In addition to large increases in per capita income, China and India have also achieved considerable gains in health and longevity. From 1960 to 2008, life expectancy at birth in China and India increased by 56.8 percent from 46.6 to 73.1 years and by 50.2 percent from 42.4 to 63.7 years, respectively. Some of the key commonalities and differences between China and India are summarized in the table below.

Successful economic and social development depends on the complex interplay of a multitude of factors. Education and training, capital and labor markets, entrepreneurship, government policies and regulations, and other important variables can all have a major impact on the pace of economic growth as well as the magnitude and distribution of increases in living standards. China has certainly not gotten everything right, nor has India done at all badly for itself either. The same highly centralized system in China that facilitates long-term planning and mobilization can be conducive to excessive regulation and control. India has done well to achieve so much in the face of corruption and other systemic obstacles that are part and parcel of the jugaad response. Still, the concepts of planning and jugaad seem to shed some light on possible lessons for future development initiatives. Indias experience suggests countries that are able to adopt value systems and institutions that limit corruption and inefficient bureaucratic red-tape stand a better chance with economic development. Chinas overall economic development and more targeted wins in clean energy, rare earths and transportation to name a few speak to the merits of longterm planning that can identify and address important development issues by facilitating the

effective allocation of resources, overcoming market failures and supplying essential public goods. India and china penchant for energy conservation India's 12th Five Year Plan (2012-2016) calls for generating more power through renewable sources such as wind and solar power at the same time, China's 12th Five Year Plan (20112015), also focuses on a greener approach to economic growth. The 12th FYP is expected to contain preferential measures for developing energy-efficiency technology, as well as an expected mandatory energy emissions target of approximately 17 percent (down from the 11th FYPs 20 percent). For the first time, this plan could contain green indicators that will hold local government officials accountable for green development, such as water consumption per unit of GDP, and proportion of GDP that is invested in environmental protection. The 12th FYP is rumored to include a new carbon emissions target that is in line with Chinas recent pledge to reduce 40-45 percent of carbon per unit of GDP by 2020, especially for high-polluting and highenergy usage sectors. In order to meet that commitment, government officials have recently made statements that a carbon tax may be implemented by 2013, as well as some type of carbon trading system by 2015, the form of which is currently being debated behind closed doors. The 12th FYP also will also contain measures for ensuring better environmental quality for cities and towns, including a blue sky day target and other mandatory emissions targets. The 12th FYP reflects Chinas pledge to have 15 percent of its energy come from non-fossil fuels by 2020 (from 8.3 percent in 2009 to approximately 11 percent by 2015). The plan includes a cap on domestic coal production, Chinas largest energy source and a major contributor to the countrys environmental problems. The plan also contains significant support for nuclear and hydropower development with wind power seeing a threefold expansion in capacity. Domestic natural gas consumption will double over the 12th FYP.

Energy conservation company- Go Green Energy consultancy company Company profile This company offers designs and advice to architects and consumers regarding environmentally sensitive buildings as well as energy consumption recommendations. Its mission is to provide the finest green energy solutions for new constructions as well as existing building owners/lessors. Through careful analysis, attentive customer support, and cost effective solutions, Go Green Consultancy will become a stable business serving the Indian community.

Services Go Green Energy consultancy company offers a wide range of environmentally-conscious energy solutions related to new and existing structures. The main areas of consulting that this consultancy will offer are:

Passive heating: This applies to the construction of the new structures, designing the structure to capture and utilize heat that is either generated naturally or as a by-product of the building. Examples of passive heating include specific placement of the heating vents, the design and placement of the building and the windows. Grey water: This is the capture and utilization of grey water. Grey water is water that has been used for some other source such as in the faucets or rain water that can no longer be offered as potable, but still can be used for toilet flushing or land irrigation. Renewable energy: This service offers customers the information needed to make intelligent decisions regarding the use of renewable energy sources. Renewable energy sources can be defined as sources of energy where the rate of energy depletion is not faster than the production rate. Examples include: wind power, photovoltaics, hydro power, biomass, solar energy. Employee transportation: This service is to reduce the energy consumed by employees traveling to work. Typical aspects of the plan are outlining public transportation options, developing a company subsidized public/alternative transportation voucher, building covered bicycle lockers and shower facilities as well as other activities designed to increase the number of employees using bicycles as their main source of transportation to work. Efficient building construction: This focuses on the use of local building materials thereby decreasing energy needed for transportation as well as the utilization of recycled materials for construction decreasing energy demands for the manufacture of new building materials.

Market Analysis

Market Segmentation Go Green consultancy has segmented its target market into two different customer groups, both equally attractive. Architects This customer group is made up of professional architects that design buildings and additions for clients. Architects have developed a strategic relationship with Go Green to offer value-addedservices for their clients. The architect firms typically have two - nine partners. Offer both residential and commercial design work, however 67% of their work is commercial. The firms typicall y have only a handful of service providers that they work with. This means that once they find someone they trust, they develop a long-term relationship with that service provider. Yearly revenue ranges from $200 thousand - $5 million.

Individual customers This segment contains consumers who are either having a residential home, or a commercial structure, designed. Due to their personal environmental concerns and a recognition that it can be cost effective to have building decisions with environmental considerations, they have requested Go Green's assistance. They are generally working directly with Go Green for their design needs and will likely then take this design criteria to their builder. The individual is an environmentalist and they take into account how their action will impact the environment. The age range of clients is 35-49. Target Market Segment Strategy Go Green consultancy has chosen these two market segments for compelling reasons. The architects have been focused on because they are the service providers that do the bulk of the design work for residential and commercial structures. The architects are used as sales people for Go Green's services, they are the ones that can then sell these services to their customers. It benefits the architects because they are able to offer a wider range of value-added-services to their customers without spending capital of learning the information themselves. By aligning itself with architects, Go Green Consultancy is able to offer their services to a larger group of people. Go Green will also serve individual customers. These are people who know that they want environmental considerations made in the design of their structure and will seek out a firm such as Go Green to have this work done. Burlington is a wonderful place to locate Go Green as there is a high population of environmentally-conscious people in this city. This provides Go Green with a large market of interested customers. Additionally, this market group is attractive because people that have environmental tendencies are often vocal about their commitments or causes. By offering green energy services, Go Green allows this group of people to act on what they believe in on a personal level, adhering to the wise saying think globally, act locally. Service Business Analysis The environmental power consultancy industry is fairly new. Only recently has there been an emergence of firms that offer these services. This can be explained by several factors. First, people are becoming more environmentally aware these days, a function of many things including the recent problems with the Middle East and Fundamental Islamists. These recent problems have forced people to reconsider America's dependence on oil and the need to maintain good relationships with Saudi Arabia only because of their oil. Another factor that has contributed to the growth of Go Green is that it has become increasingly cost effective to make business decisions while taking into account the decisions impact on the environment. For years an environmental decision was based on personal consciousness and ethics, not overriding economic factors. Now money can be saved when environmental impacts are taken into account. Please read the following section which will indicate the different players within the industry.

Competition and buying patterns The competition generally takes two different forms: Eco-architects These are architects that specialize in environmental design considerations. Typically their entire practice is based around structures that have environmental elements. Go Green could actually be within this industry niche, however they are able to serve a larger customer baser, therefore earn more revenue as well as make a positive impact in our world by offering its services to both end consumers as well as regular architects as opposed to the business model of only serving one set of customers. Local utility The local utilities often have a department that offers free consultation for environmental design considerations. There are incentives for the utilities to attempt to curb their customer's use of their energy. These incentives take the form of not needing to make as many capital expenditures to develop the power delivery infrastructure to accommodate the increased load for energy demands. Therefore, the more the utility is able to get their customers to conserve, the less money they have to spend on infrastructure improvements, the more money they earn. That being said, the utility often has a small department that offers tips on energy conservation. While these tips can be quite helpful, since they are offered for free for the power customers, they are not nearly as comprehensive as they could be. So while they provide good initial tips, the local utility is not a strong competitor to serve a client who is committed to making as much of a positive environmental difference as can be achieved by using a specialized firm. The buying pattern for consumers is currently being defined as we speak, a function of how new the industry is. Currently, purchasing decisions are based on customers typically making requests for these services from their architect or they do a bit of research to determine who offers these services. As the industry becomes more mature, firms will become more established and reputation and visibility/awareness will shape buying decisions. Since there is a wide range of options regarding implementation, price is less of a consideration for the decision since most of the service providers can offer a wide range of inexpensive to expensive options.

Marketing and differentiation Strategy The marketing strategy is based on developing an awareness regarding Go Green's services to both architects and the end use consumers. Go Green will strongly use networking as a means to develop relationships with many of the city's architects. Although Burlington is a reasonablysized city, the architect community is fairly close knit. If one wanted, it is easy to develop active relationships with many of the different architects in Burlington. By developing these relationships, Go Green will allow the firms to become familiar with not only the services offered by Go Green, but also the personalities involved, recognizing that much of business is transacted by who you know. Advertisements will be placed in the local architect newsletter. To reach the end user customers, Go Green will use Advertisements in the local paper as well as within the yellow pages. As a means of increasing visibility of Go Green, GP will participate in several community-based seminars that serve as a free source of information for the citizens of

Burlington. Go Green believes that participating in the seminars will be an effective way of meeting many of the potential customers and allowing them to become familiar with Go Green expertise.

Conclusion Adequate availability of energy is one of the basic requirements for faster economic growth. Ensuring certain minimum level of energy consumption for everyone is a critical requirement for providing basic amenities required by everyone. The overall availability of energy would need to be increased substantially to meet these twin objectives and to enable a sharp reduction in energy demand and supply gap. It implies that the pace of addition of power generation capacities would need to be stepped up. At the same time use of greener technologies to safeguard environment and have a sustainable growth. Development of energy markets will be promoted as part of this overall policy to help this process. This will ultimately lead to greater competition and better prices for consumers.

References
http://12thplan.gov.in/displayforum_list.php http://www.apcoworldwide.com/content/PDFs/Chinas_12th_Five-Year_Plan.pdf http://www.wri.org/stories/2011/03/how-does-chinas-12th-five-year-plan-address-energy-andenvironment http://www.globalsherpa.org/wp-content/uploads/2011/03/China-India-DevelopmentIndicators-Statistics.gif