Social Entrepreneurship

IN NEWS:

• Union Minister for Education and Skill Development & Entrepreneurship launched the second edition of the Social Trailblazer Program by Incubator for Social Enterprises and Entrepreneurs Development at the Institute of Rural Management. The program aims to further boost the social entrepreneurship ecosystem at the grassroots and nurture early-stage entrepreneurs.

SOCIAL ENTREPRENEURSHIP:

• Social entrepreneurship is the process by which individuals, startups and entrepreneurs develop and fund solutions that directly address social issues.
• A social entrepreneur is a person who explores business opportunities that have a positive impact on their community, in society or the world.
• Social entrepreneurship is a for-profit endeavor, even though a greater emphasis is placed on creating social or environmental changes.
• Social entrepreneurship aligns with trends like Socially Responsible Investment and Environment, Social and Governance (ESG) investing.

WHY INDIA NEED SOCIAL ENTREPRENEURS:

• Address social problems:
  • Social impact entrepreneurs are not limited by traditional approaches to drive social change at scale. They are willing to take risks to find new and effective solutions. They leverage their business acumen and creativity to create sustainable solutions that have a positive impact on society.
• Ensure inclusive growth:
  • Social impact entrepreneurs can play a vital role in promoting inclusive growth by creating opportunities for marginalised communities. They can create jobs, provide training, and support the development of small businesses. By doing so, they can help reduce poverty and inequality in India.
• Employment generation:
  • The social acceptability of entrepreneurial careers is increasing in India. The success stories of entrepreneurs and unicorns are receiving much media attention today. Hence, entrepreneurship can become the new engine of growth.
• Solving environmental challenges:
  • India faces significant environmental challenges, including air and water pollution, deforestation, and climate change. Social impact entrepreneurs can create sustainable solutions to address these challenges.
  • For example, they can create ventures that promote renewable energy, reduce waste, or promote sustainable agriculture.
• Innovating for greater social impact:
  • Social impact entrepreneurs are known for their innovative approaches to social problems. These solutions can be replicated and scaled, leading to even greater social impact.
• Bridging the gap between the public and private sectors
  • Social impact entrepreneurs can work with the government to create sustainable solutions to social and environmental problems. By doing so, they can leverage public resources and policies to create a more significant social impact.
  • They can also work with the private sector to access capital, technology, and expertise, leading to more innovative and effective solutions.
• Creating sustainable ventures:
  • Social impact entrepreneurs focus on creating sustainable ventures that generate revenue and profits while also creating social impact. By doing so, they create sustainable models that can be replicated and scaled.
  • They also create a positive feedback loop, where social impact leads to increased revenue and profits, leading to even greater social impact.

CASE STUDY: TOMS

• Founded by Blake Mycoskie in 2006, TOMS began a one-for-one social entrepreneurship model, in which a pair of shoes would be given to children in need for every pair of shoes they sold.
• Today, TOMS has given over 95 million shoes to people in need, and has expanded their giving model to include access to safe drinking water, eye surgery, bullying prevention and safe births.

SOCIAL ENTREPRENEUR OPPORTUNITIES IN INDIA:

• Education:
  • Affordable private schools
  • Curriculum development and pedagogy tools
  • Infrastructure
• Agriculture:
  • Agricultural mechanization
  • Post-harvest support
  • Financial inclusion
  • Support for organic and sustainable framing practices
• Healthcare:
  • Health Insurance
  • Medical devices
  • Health care infrastructure
  • Building centralized information
• Renewable energy:
  • Generation from diverse sources
  • Improved delivery models
• Manufacturing
• Skill development

CHALLENGES:

• Limited sources of finance:
  • Methods used elsewhere in the world have not been tried or are not applicable in India. For instance, equity crowdfunding and pre-order crowdfunding are widely prevalent in US and Japan, but not in India.
• Access to supporting infrastructure:
  • Support mechanisms like incubators, science and technology parks, business development centers etc. remain largely restricted to tier I and tier II cities. Lack of access to such support mechanisms increases the risk of failure.
• Revenue generation:
  • Despite increasing incomes, the Indian customer base continues to be price-sensitive towards products and services. Also, convincing them is difficult, especially if the entrepreneur develops innovative products and caters to new market segments. Hence, it is difficult for entrepreneurs to generate a paying customer base.
• Lack of mentorship:
  • Most of the entrepreneurs have brilliant ideas and/or products, but have little or no industry, business, market experience and branding strategy to get the products to the market.
• Regulatory hurdles:
  • Terms for start-ups to qualify for government benefits are too stringent and the application process cumbersome. This, coupled with multiplicity of laws and red tapism, results in delays in registration, acquiring licenses and permits, data storage and processing, contract management etc. 

PRACTICE QUESTION:

Q.  Social entrepreneurship enables the creation of sustainable ventures that generate revenue and profits while creating social impact. Discuss.