Social Entrepreneurship

• 13 Jul 2023

For Prelims: Social Entrepreneurship, Social Trailblazer Programme, ESG, Impact Investors Council.

For Mains: Need for Social Entrepreneurship in India and related Challenges.

Source: PIB

Why in News?

The Union Minister of Skill Development & Entrepreneurship, while addressing a Social Enterprise Conclave organized by Institute of Rural Management, Anand (IRMA) in partnership with LIC Housing Finance Limited has launched the 2^nd edition of the Social Trailblazer Program, aiming to boost the Social Entrepreneurship Ecosystem in India.

What is the Social Trailblazer Programme?

• About:
  • It is a programme for Social Enterprises and Entrepreneurs Development, which nurtures early-stage rural, social, and collective enterprises.
  • The program aims to nurture the evolving ecosystem of Indian Social Enterprises.
• Objective:
  • The goal is to promote the Social Enterprise programme so as to promote the development of social enterprise and social investment to help address entrenched social and environmental problems.
• Focus Areas:
  • Agriculture
  • Green Technology
  • Finance Technology
  • Education
  • Renewable Energy
  • Healthcare & Life sciences
  • Human Resources
  • Marketing
  • Social Impact
  • Waste Management
• Key Incentives: A financial award Upto INR 25,00,000 in the form of Equity Funding and upto INR 5,00,000 in the form of Grant Funding top 10-12 selected startups
  • 1 year of personalized incubation and acceleration support at IRMA ISEED Foundation
  • Top-up Incentives: Upto INR 50,00,000 follow-on investment from IRMA ISEED'S Networks.
    • Upto USD 1000 worth of AWS (Amazon Web Services) credits and technology support.

What is Social Entrepreneurship?

• About:
  • Social Entrepreneurship is the practice of using business models to address social and environmental problems.
  • Social entrepreneurs, also known as social innovators, bring about positive change through innovative ideas. They aim to create social impact while also generating revenue and profits.
  • They identify problems and create solutions to make a difference. Social entrepreneurship aligns with trends like Socially Responsible Investment and Environment, Social and Governance (ESG) investing.
    • Examples: Educational programs or providing banking services in underserved areas and helping children orphaned by epidemic disease.
• Types:
  • Community Initiative:
    • A community initiative is a small-scale project aimed at addressing a specific issue within a community. It is particularly beneficial for marginalized and underprivileged communities that are disconnected from the larger economy.
  • Non-Profit Organization:
    • A non-profit organization is a group that is established with the intention of not making a profit, and in which no part of the organization’s revenue is given to its directors, officials, or members.
  • Social Enterprise:
    • An organization that uses commercial tactics to optimize advances in monetary, social, and environmental well-being is referred to as a social enterprise. This can entail increasing both social impact and profits for co-owners.
  • Co-Operative:
    • A co-operative is a free-standing group of people who come together voluntarily to work for the same economic, social, and cultural goals through a democratically run, collectively owned business.
  • Social Conscious Business:
    • Social consciousness is regarded as having a sensitivity to and sense of responsibility for injustice and social issues. The awareness of individuals within society is related to consciousness.
• Achievements:
  • According to the Impact Investors Council (IIC) report, over USD 9 billion has been invested in over 600 impact firms in India that have a positive impact on 500 million lives.
  • Besides improving education for more than 226 million children and teenagers, these social entrepreneurs have helped reduce more than 192 million tonnes of CO₂.
  • They have promoted social inclusion for over 25 million individuals and assisted more than 100 million people gain access to electricity.

What is the Need for More Social Entrepreneurs?

• Tackling Social Problems:
  • Social impact entrepreneurs have the ability to drive significant social change on a large scale. Unlike traditional approaches, they are open to taking risks.
  • They utilize their business expertise and innovative thinking to develop sustainable solutions that benefit society.
• Promoting Inclusive Growth:
  • India's economic growth has been impressive in recent years, but it has not been inclusive. There is a significant gap between the rich and poor, and many marginalized communities are left behind.
  • Social Entrepreneurs can play a vital role in promoting inclusive growth by creating opportunities for marginalized communities.
• Tackling Environmental Challenges:
  • India faces significant environmental challenges, including air and water pollution, deforestation, and climate change. Social 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. By doing so, they can help protect the environment and promote sustainable development.
• Bridging the Gap between Public and Private Sectors:
  • Social 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.

What are the Challenges of Social Entrepreneurship in India?

• Future Issues and Hypothetical Concerns:
  • Social entrepreneurs tackle possible future issues such as overpopulation and sustainable energy sources, which makes it harder to attract investors who are more inclined towards safer, profit-driven projects.
• Business Strategy:
  • Social entrepreneurs also face the challenge of developing a strong business strategy. They need support from professionals like attorneys, accountants, and experienced entrepreneurs to create a solid business plan that aligns with market realities and customer needs.
• Lack of Funding:
  • Unlike traditional businesses, social enterprises often have to balance financial returns with social outcomes, which can make them less attractive to investors or donors. Moreover, they may face higher costs, risks, and uncertainties due to the complex and dynamic nature of the social problems they address.
• Lack of Balance:
  • Social entrepreneurship can be very demanding and stressful, as it involves dealing with complex and urgent issues, facing multiple pressures and expectations, and making sacrifices and trade-offs.
  • This can lead to burnout, exhaustion, or loss of motivation, which can affect their well-being and effectiveness.

Way Forward

• Social entrepreneurship has evolved over the years and has given innovative and profitable ideas that address social problems.
  • The social entrepreneurship ecosystem in India is among the most developed in the world. It provides numerous opportunities to collaborate with local partners, learn from their experiences, and pursue creative solutions to some of the country’s many social problems in the areas of education, agriculture, healthcare, renewable energy, manufacturing, and skill development.
• The need of the hour is a nourishing ecosystem for social entrepreneurs to take up programmes, bridge pandemic-induced gaps, scale-up existing initiatives, and be part of the mainstream response system.