The Confederation of Indian Industry (Southern Region) recently announced a competition designed to stimulate social entrepreneurship. The initiative is open to both startup social enterprises as well as students with socially-oriented entrepreneurial ideas that could have a meaningful impact on society. Primarily, the Confederation of Indian Industry (CII) strives to foster an environment that supports India’s development through partnerships with industry, government, and civil society, operating as a non-profit, industry-led and managed organization.
Understanding Social Entrepreneurship
Social entrepreneurship merges the concept of business with philanthropic values. Essentially, it involves creating business models that offer low-cost products or services to address societal inequalities. In turn, these businesses often see success due to the focus on social and environmental missions. Social entrepreneurs, who are also referred to as social innovators, act as agents of change by identifying societal issues and finding innovative solutions to them. This trend complements other types of responsible investing, such as SRI (Socially Responsible Investing) and ESG (Environmental, Social, and Governance). Examples include educational programs, banking services for underserved communities, and support for children orphaned by disease.
Social Entrepreneurship’s Role in India
India is in dire need of social entrepreneurs who can tackle various pressing societal concerns, ranging from sanitary conditions, education, and water preservation to gender bias, health care access, female foeticide, carbon emissions, and other environmental issues. Many of these concerns persist, highlighting the urgency for creative solutions.
Indian Success Stories in Social Entrepreneurship
Training organizations for youth leadership roles, Pravah and ComMutiny, were recognized as Social Entrepreneurs of the Year 2020 by the Schwab Foundation and Jubilant Bhartia Foundation. Since its establishment in 1993, Pravah has contributed to the development of empathetic, socially conscious youth in India. Similarly, ComMutiny, formed in 2008, builds upon the idea of creating collectives out of organizations like Pravah. Another notable example is Dr. Govindappa Venkataswamy’s Aravind Eye Hospitals, whose self-sustainable business model has significantly contributed to blindness eradication among impoverished rural Indian communities.
Challenges and Potential Solutions
Social entrepreneurs often face difficulties formulating comprehensive market-driven business plans, compounded by geographic limitations due to funding restrictions. They could use support from legal professionals, chartered accountants, and experienced entrepreneurs to overcome these hurdles. The 2013 Companies Act in India, which mandates companies to donate 2% of their net profits towards Corporate Social Responsibility (CSR), has spurred investment in social projects but requires a more coordinated approach to scale effectively. A Venture Philanthropy firm or an ecosystem player could help social entrepreneurs navigate the investment landscape, organize potential investors, and facilitate introductions to them. Moreover, there is a pressing need for effective ‘impact-measurement’ to demonstrate outcomes to investors.
Related Initiatives
The Securities and Exchange Board of India’s initiative to establish a Social Stock Exchange (SSE) aims to boost social and environmental impact investing in India. This platform will fund social-sector organizations and develop a standardized framework for measuring and reporting social impact to both donors and investors. Established in 1999, the Gramin Vikas Trust (GVT), aims to significantly improve the livelihoods of poor and marginalized communities, especially tribal populations, including women, through social entrepreneurship.
Future Outlook
Social entrepreneurship has evolved over the years, producing innovative and profitable ideas that address societal issues. With an increase in concept incubation and funding for social enterprises, success stories such as Amul, Barefoot College, and Grameen Bank indicate India’s potential to create more socially relevant enterprises.
