In my continuing blog series on the foundation’s 10 lessons learned in impact investing from our experience in India over the last decade, I look at how technology is useful as a facilitator in social enterprises, but ought not to be considered as a solution in itself.
Social enterprises benefit from technology in many ways, especially considering the cost imperatives and inadequacy of resources they face. The right technology can help organizations enhance quality, fuel innovation, and aid efficiency, while also reducing the cost of operations through better delivery. However, though technology is a significant facilitator, it cannot be an independent solution for the problems that these enterprises are trying to address. In education, particularly, while a strong technology platform is necessary to scale, beneficiaries such as principals, teachers and students are really interested in how technology can be tailored effectively to the content that is being shared. This insight is drawn from our experience in 2012, when the foundation made one of its first impact investments in Indian education in Edutel, an organization that deploys a hybrid model, which effectively blends robust technology and great content to deliver quality education and improve learner outcomes.
There are some key takeaways from our journey with Edutel:
Innovative, technology-based solutions help ease execution challenges: One of the biggest obstacles in the education space in India is the absence of qualified teachers in millions of government schools, which leaves a large population of underprivileged children high and dry. The demand-supply gap is so wide that a disruptive innovation like the one created by Edutel is required to bring competent teachers in every classroom—just like how mobile telephony has transformed telecommunications and access by eliminating the challenge of laying telephone lines across India. What differentiates Edutel is the fact that it has an innovative satellite-based technology solution that allows teachers to broadcast lessons from central studios into multiple classrooms across hundreds of schools, while at the same time enabling two-way communication between teachers and students. A network of satellites and ground studios set up by the Government of India, which are available for use at a very low cost, are leveraged for this purpose.
While technology is a facilitator, quality content is king: In education, unlike telecommunications, technology itself is not the solution. It is not enough to provide the communication infrastructure to connect teachers and students. What matters is the content that is disseminated via the infrastructure. Simultaneous to its investment in technology, Edutel maintains excellence in the quality of its curriculum. It retains faculty from leading schools, universities, and government agencies to manage the creation of courses and has a fairly large team that focuses on the creation and curation of academic content. The hallmark of its content is the use of digital animation to convey critical and foundational concepts. In addition, a Q&A feature during learning sessions enables students to interact with teachers and clarify doubts. Edutel also focuses on delivering content in local languages, while it scales to diverse regions across India.
Ultimately, the key is an integrated solution: The combination of both technology and content has enabled Edutel to achieve strong results in both impact and scale. Edutel’s technology is now present in over 1,300 schools around Karnataka and it has expanded its content offering to include high school and vocational training as well.
Technology is often just one part of the solution for challenges that social enterprises are solving, and it needs to be integrated with other components to be effective.
Across our portfolio, technology is often just one part of the solution for challenges that social enterprises are solving, and it needs to be integrated with other components to be effective. Take the case of Micro Housing Finance Corporation (MHFC), which offers micro-mortgages for low-income families. MHFC leverages its technology system to ensure a quick turnaround of proposals, assess credit scores of individuals, benchmark with similar clients, and maintain customer documentation before any loan is sanctioned. As a result, MHFC’s turnaround time and documentation is amongst the best in the industry. It has achieved this despite the relatively low ticket size of its loans, lack of customer documentation to prove income, and a target segment that is perceived as high risk. A significant percentage of MHFC’s clients—amongst the highest in the industry—is also able to access the credit linked subsidy announced under the Prime Minister’s Awas Yojana using its technology platform.
To summarize, building pioneering technology that tackles social issues effectively is challenging in itself, however, it is a holistic solution that creates truly scalable and sustainable impact. In my next post in this series, I will look at the importance of customer protection in social enterprises.
Other blogs in this series: