HONG KONG -- While many companies on India's stock market struggled amid market turmoil in recent weeks, one hospital chain has outstripped all expectations since being listed in January. On average, stocks in India have plunged roughly 10% since the beginning of the year, but Narayana Hrudayalaya shares have been trading at more than 10% higher than its public offering price.
The hospital chain was founded in 2000 by Devi Shetty, a former personal physician to Nobel Peace Prize laureate Mother Teresa. Narayana has managed to cut the cost of heart transplant operations to roughly 3% of that in the U.S., opening up affordable healthcare to millions of the country's poor.
The type of business is typically referred to as a "social enterprise." In a country where a significant proportion of people live in poverty, Shetty's vision was to bring the cost of surgery to within the reach of every citizen. The number of cardiac operations conducted in his hospitals now stands at 14,000 annually.
Importantly however, Shetty is not a philanthropist. He is an entrepreneur. A plate in his Bangalore office reads: "The world's biggest problems are also the world's biggest business opportunities." He says that where a charity folds when the money runs out, a business can expand, even when it insists on making a sustainable contribution to society.
Narayana's business model is now featured as part of a course at Harvard University entitled "Contemporary Developing Countries: Entrepreneurial Solutions to Intractable Social and Economic Problems."
The course is open to students from across all faculties of the university and is part of a growing movement at Harvard, where greater focus is placed on identifying ways of applying commercial principles to sustainable development goals.
Courses looking at social entrepreneurship are far from new, but have been gaining in popularity in recent years. Harvard in particular has ample reason to be at the forefront of this movement.
Having always been a key driver of business in the U.S. and across the world, Harvard graduates number heavily among the top posts on Wall Street. Many were heavily involved in the actions that led to the Lehman shock in 2008.
Wall Street came in for intense criticism for putting profits before society, and the anger of many American citizens has diminished little in eight years since. The U.S. government has also sought to reign in the financial industry.
In his Budget Message announced this month, President Barack Obama unveiled further controls on excessive risk-taking by financial institutions. The latest measures include charges imposed on the liabilities of major financial companies, and doubling the funding of the Securities and Exchange Commission and others over the next five years.
Meanwhile, entrepreneurs and investors like Shetty, who take it for granted that businesses should have a positive impact on society, may be growing a little tired of hearing the words "social enterprise." If more people follow their lead in "doing charity by doing business", perhaps the "social" part of the term will one day become obsolete.