Competition & Collaboration
28th february, 2019
In the modern economy, competition has spurred vast development. Driven by scarcity, limited resources put pressure on individuals and businesses to constantly improve and optimize, preventing stagnancy and encouraging innovation. It has incited incredible progress in fields such as medicine, agriculture, and education, thus improving the lives of countless people. Competition comes back, however, to the understanding that at some level, the rewards and profits of conducting business cannot be shared and thus need to be coveted.
The traditional market may say that the rewards of conducting business is money. In the social impact sector, however, there are different values at play. Their focus branches outwards, rather than inwards, as companies and individuals seek to use the resources available to them to contribute to the progress and betterment of global issues and marginalized populations. Just as any business, social enterprises must have the best offering, design, marketing strategy, and price point in order to compete in the market. But in the social sector, organizations seek returns in the form of impact. The focus on positive impact and reinvestment into society is universally shared across the sector. In other words, players are on the same side as their competitors. If one organization creates impact with their product, the existence of another organization that can do it better simply creates two sources of impactful work.
Social impact is not a zero-sum game. The more there is, the better.
While competition can separate out the best and most effective products and services, there comes a point where the market becomes saturated with offerings that strategically address different aspects of the social issue it is trying to solve. If each solution offers unique value, should solutions be weeded out? Does competition really serve the same purpose in the social enterprise ecosystem as it does in other economic ecosystems? Should socially impactful products be competing against each other, or should we be working to collaborate to create the most impact?
While the answer very well may be that competition is vital to the growth and effectiveness of social enterprises, the exercise of asking these questions has been significant to me as I've been working in the impact investing ecosystem in Bangalore. The idea of encouraging collaboration within the social sector is one that I find powerful. When the main goal is impact, bringing all the ideas and changemakers together and working to develop the most effective solution seems strategic in a competitive market.
One great example of collaboration within a competitive environment is Tesla, who made their technology open source and committed that they will not initiate patent lawsuits against anyone who uses their technology. Why? Because Tesla's goal is to drive the movement towards sustainable transportation. They realize that their production capabilities aren’t sufficient to address the climate crisis alone. The more car companies that take advantage of their electric vehicle technology, the more impact they will be able to create and the closer we will be towards reducing the use of gasoline-based vehicles.
At Gray Matters Capital, there's a growing focus on ecosystem development which seeks to connect stakeholders in the education sector. These efforts bring together foundations, NGOs, and social enterprises, motivated by the common goal to improve the affordable private schools throughout India. These partnerships create a consolidation of the value-adds, perspectives, and opinions of each organization, creating a valuable space for discourse and action. For example, GMC co-created a Quality Charter for budget private schools in conjunction with the National Independent Schools Association, leveraging the resources and reach that each organization has, with the intent of improving the quality of schools around India. As these partnerships are developed, the scope of collaboration continues to incorporate more organizations with different roles in the ecosystem. While these efforts don't decrease the level of competition within the sector, it creates space for valuable partnerships that would otherwise be difficult to forge, with the goal of creating the greatest possible impact.
I believe that as we shift into a system of more compassionate and ethical capitalism, the values and paradigms typically associated with business will start to change. When we can incorporate more cooperation into our business structures, we become more likely to learn from others, gain diverse perspectives, and create more effective solutions to pressing issues. Whether it's through open source technology, focused ecosystems, or platforms, perhaps we need to move away from a culture of winning alone towards one of winning together.