Source of picture: Rex Features
By John Richardson
PETROCHEMICALS companies have traditionally concentrated primarily on feedstock advantage, cost efficiencies and location in order to achieve success because demand during the Supercycle largely took care of itself. This is no longer good enough.
In the first of a series of blog posts on ways that companies can create their own sustainable sources of demand, we look at healthcare.
"More than 100 years after the first heart surgery, less than 10% of the world's population can afford it. India requires over 2 million heart surgeries a year, but all its heart hospitals put together perform operations on fewer than 110,000 people," writes Devi Shetty, the Indian philanthropist and cardiac surgeon, in The Economist's 'The World in 2013' supplement.
"It is thought that less than 10% of the world's population can afford any major intervention on the heart, brain, kidney joints," adds.
He blames this on a lack of innovation in financing healthcare as a result of too much focus on developing "a magic pill, a new vaccine or a faster scanner rather than delivering what is already available".
In the developed world, health funding was devised when people retired at 60 and died at 65. But now, as we discussed yesterday, they are retiring at 60 and are living into their eighties, thanks to a health explosion.
"With the rise in life expectancy in emerging economies as well as developed ones (thanks to better living conditions, technology and social-support systems), taxpayers' money will no longer be enough," he continues.
In India, 450 million people do not pay taxes and so have no state healthcare cover. Only 50 million in India have state healthcare cover.
His solution is micro-financing through mobile phones.
"India has over 925 million mobile-phone subscribers, who spend about 150 rupees ($2.80) a month just to speak on a mobile phone," he says.
"If every mobile-phone subscriber had to pay 20 rupees a month towards health insurance, the money collected would be two-thirds of the government's total budget for healthcare."
India has a tremendous opportunity to introduce universal health care through such innovations because it has the largest number of doctors, nurses and medical institutions in the world, he adds.
Petrochemicals companies also have a huge opportunity to work with governments, with NGOs and with companies in other industrial sectors in order to help solve the health financing crisis.
Just imagine if your company introduced a successful micro-financing scheme in India.
It would be helping to create demand for its products by ensuring that many more people lived healthy and therefore economically successful lives.
And such a company would be generating tremendous goodwill for its business while doing something immensely worthwhile.