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The Emergence And Growth Of Social Entrepreneurship in India

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Arun Sharma:

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 Children’s 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, it’s 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 doesn’t hamper the progress of the third sector but infact 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.

So what do you think about social entrepreneurship in India?

Drop in a comment below or mail us at info@youthkiawaaz.com, you can also tweet us at @YouthKiAwaaz.

The writer is the Singapore correspondent at Youth Ki Awaaz.

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  1. Amol

    yes..nice thoughts . Another point I want to make is huge profits can be made in Indian markets catering to people at the bottom of pyramid. The companies could get huge profits selling in mass market such as India if they are able to keep their unit costs down. The huge and already successful mobile market is the best example of this.

  2. sarah

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Alena

    http://grantfoundation.net

  3. ArUn ShArMa

    Hi Amol, thanks for your comments. I agree with your thought and I think many companies have realised this fact. If you look into the Shakti program launched by Unilever in India, it's one such example. And sooner or later, the companies will have to realize that that's the way forward. I suggest you read the article by Paul Bennett in Financial Times on 31st December ("The biggest idea might be learning to think small"). He has also expressed similar views as yours.

    @Sarah: Thanks for the appreciation Sarah. I assume that you were talking about this website http://www.youthkiawaaz.com. Keep visiting. 🙂

  4. Anonymous

    yes charity is not the answer to porety and underdevlopment …….. devlopment can be achived only if its backed by profit motive … nice thoughts

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A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

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