The economics of social progress

On McKinsey's "What Matters" blog, Iqbal Quadir, founder of the Grameen phone company writes an excellent article on the interplay between profit and social enterprise. Among other topics he discusses why charging for a service (v. giving it away) provides a better foundation for scaling the ability to help people than giving it away. He also shares some lessons learned about pricing and the need to hold firm to pricing strategies that allow a service to become profitable, even though it may limit the near-term social benefit. In the long run, the prices drop as the service scales, thus bringing economic benefit on a much broader scale than could achieved otherwise.