12. The actions of entrepreneurs of all types serve to decentralize power. In many contexts, entrepreneurs—social and other—serve to make both markets and governments function more efficiently. They increase transparency and accountability, reduce the power of incumbents by increasing consumer options, and introduce techno- logical and organizational innovations. In these and other ways, they put pressure on incumbents (including governments) to improve the quality of goods and services provided. Understood in its complete context, entrepreneurial entry is a vital element of a dynamic process that compels economic efficiencies to work in the service of, rather than in opposition to, good governance.
13. Consider the value created by the Aravind Eye Care System, a collection of hospitals and clinics founded in 1976 by Dr. Govindappa Venkataswamy, or “Dr. V” as he was known to all, a retired ophthalmologist living in the south Indian city of Madurai. Aravind’s product is the restoration of sight. Its customers are the blind, many of them desperately poor. The challenge that faced Dr. V was to reduce the cost of a procedure and increase its availability. In the years that followed, Dr. V developed a business model inspired by Ray Croc, the founder of McDonald’s, not by Florence Nightingale. In the last 30 years, Aravind has cured more than 2 million people of blindness. That Aravind offers its cataract removal procedures free to its poorest patients is only one side of the equation—and the less interesting one at that. What makes Aravind distinct is that the value to the patients of the service provided—the restoration of sight—is so great. What is of significance, in other words, is the difference between price and private valuation: the consumer surplus.
14. But what can be said of the unforgiving logic of scale? Given the magnitude of 21st-century challenges—bringing an end to large- scale poverty, dealing with global climate change, and coping with emergent global threats to public health—what role can entrepreneurs of any type play in realistic strategies? The skeptic may still maintain that a handful of small enterprises and nongovernmental organizations, however well intentioned, will never make more than a dent in such immense problems. Whatever solutions exist will have at their center national governments, international organizations, and multinational corporations. Up to this point I have emphasized the extent to which the actions of entrepreneurs create both private value through provision of goods and services, and social value by improving the efficiency of markets and governments.