The Emergence and Growth of Social Entrepreneurship in India

Social Entrepreneurship as the concept was coined long ago but has been in the corporate
parlance in just the recent past. Traditionally, entrepreneurship has been associated with profit
making individuals who aim high and achieve a lot for themselves in the world of tough
competition. And the success of enterprise was and is being judged on parameters like ROI and
Net Income margins. But, with the empowerment and awareness of the citizens of the
developing world, a new revolution has started, particularly among the youth of the world. This
revolution is the growth of Social Entrepreneurship the form of entrepreneurship where
profits are not the end result, but just the means to achieve the end result of social upliftment
and further empowerment.

Initially, the concept of social entrepreneurship used to be associated with the Corporate Social
Responsibility of the corporate houses that provided funds to the charitable institutions to run
the philanthropic organizations at a small scale. These institutions or organizations did not have
any business model of their own and largely operated with the funds from government or
donations from the donors.

Globally, non-profit organizations like SOS Childrens Village, however large they are, are
funded completely by the donors who are the charitable trusts, individuals, governments or
corporates. Though the objectives are noble and the achievements are incredible, the business
model of these organizations is to be judged on two very important parameters: Sustainability
and Scalability.

Can these non-profit organizations sustain on their own if the external funding from them are
unplugged? Can this model be applied to other sectors successfully? As explained by CK
Prahalad through his book The Fortune at the Bottom of the Pyramid, social cause has always
been considered a moral obligation that cannot be fulfilled by means of business. But the
paradigm shift took place when the entrepreneurs realized the potential of the untapped markets
that could generate profits for them and provide a better way of life to citizens of the society at
the same time. The biggest boost was given by the Nobel Prize winner Dr. Mohammad Yunus
when his brain-child Grameen Bank became so successful in one of the so-called least
developed countries, Bangladesh. It was soon realized that profits can be made along with
serving the society, provided you treat profits as a means and not the end result.

Subsequently, initiatives like Casas Bahia and CEMEX in Brazil, and ITC e-choupal and
Aravind Eye Care sprung up in India. Most of these initiatives are well into their second-
generation, in business terms. In India, various other organizations like SEWA, AWAKE,
Nandi Foundation and Jaipur Foot have been started by the awakened and empowered citizens
of India. But as they say, Entrepreneurship is contagious and so is Social Entrepreneurship.
This sector, called the third sector in the book The Emergence of Social Enterprise, has
been growing at a very high pace even through the current economic downturn. Definition of
social entrepreneurship has changed over time. From corporate philanthropy to non-profit and
now to self-sustainability, Social Entrepreneurship has evolved and will keep evolving with
time and needs of the world.

But the major challenge that Social Entrepreneurship faces today is the definition of the goals
and the objectives. Unlike the corporate sector where the achievements are clearly defined and
roles identified, its seldom to be seen in the social sector. Organizations like SEWA are content
to provide employment to the women in downtrodden areas of India, but do not have any goals
in terms of the number of employed women or the average salaries, if these parameters can be
justified as relevant goals in the first place. Nevertheless, this challenge doesnt hamper the
progress of the third sector but in fact makes it more challenging for the entrepreneurs to
explore.

The above flow of thoughts can be summarized by approving the fact that intention is a critical
parameter to distinguish between the two forms of entrepreneurship Social and Business.

Can social entrepreneurs drive inclusive

growth in India?
Over 60% of the Indian population still live on less than $2 a day. In the World Economic
Forums Inclusive Growth and Development Report 2015, India is placed second highest in
terms of net income inequality among 34 countries in the lower middle-income group.

India has made rapid strides in economic growth, but how can it maintain a healthy rise in GDP
and also address inequality among its citizens? This will require structural changes and
investment in growth-spurring areas, such as human capital. But it will also require equal
opportunities for citizens: access to basic nutrition, education, energy and finance, as well as
job and entrepreneurship opportunities.

Social entrepreneurs are key to delivering basic services and opportunities to Indias have-nots.
Every year, the Social Entrepreneur of the Year Awards, organized by the Schwab Foundation
and the Jubilant Bhartia Foundation, attracts hundreds of social entrepreneurs from all over the
country. Some of them employ innovative, cost-efficient and often technology-enabled
business models that offer basic services to those who lack access. Others are working hard at
removing barriers that prevent access.
These entrepreneurs are not only outstanding in the Indian context, but also on a global level.
Its something we at the Schwab Foundation and World Economic Forum have seen confirmed
time and again. Many of these organizations work at an impressive scale serving millions of
low-income households and transforming their quality of life.
One example is Aravind Eye Care System in Southern India, which focuses on curing blindness
among Indias poor. The hospital chain has approximately 12,000-15,000 outpatient visits and
1,500 surgeries each day. Another example is Karuna Trust: its public-private partnership
model serves more than 2 million low-income clients by transforming government primary
healthcare centres into hubs of low-cost, high-quality healthcare delivery. Nidan,
meanwhile, has organized close to a million workers in the informal economy across India into
collectives and enterprises, secured their access to markets, technology and financial services,
and successfully influenced government policy on their social and economic inclusion.
However, seen against the backdrop of social challenges facing the country, their efforts fall
short; their impact is often limited to select geographies. How can India build on the wonderful
work by these pioneers for social change on a national scale? The answer may not be in
identifying more innovations; it may instead be in faster replication and scaling up of social
enterprise innovations that we know work. For this, we will need to invest in best practices and
capacities, removing barriers to scale, implementing conducive policies and fostering
collective action across sectors.
True public-private collaboration is key to making this happen. When designing and
implementing policies, the government should draw on the knowledge and experience of social
entrepreneurs, ideas and dynamism of its youth, and capabilities of the corporate sector to plan
and execute large-scale projects.
Indias young people are critical agents for replicating social enterprise ideas throughout the
country with half of its population under 25 years of age, India has an unrivalled youth
demographic.
Beyond their direct reach and impact, social entrepreneurs represent a powerful idea, an idea
that is relevant today more than ever before that business can be a vehicle to create both
economic value as well as contribute to building a fair and equitable society. Indias corporate
champions have an opportunity to deepen their corporate global citizenship by joining forces
with the government and social entrepreneurs in scaling these innovations.
Delivering on Indias inclusive growth agenda calls for multi-pronged interventions. One of
them needs to be cultivating and nurturing its innovative social enterprises through public-
private cooperation.

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