Social Entrepreneurship in India 26 September 2022
For Prelims: Challenges of social entrepreneurship, types of social enterprise, and Poverty, ESG (Environmental, Social and Governance) investing.
For mains: Characteristics of social entrepreneurship, advantages and disadvantages of social entrepreneurship, and its economic significance.
Why in the news?
Governments and corporations are increasingly using social entrepreneurship in their decision-making procedures to address major socioeconomic and environmental problems on a global scale.
What do we need to know about Social Entrepreneurship?
Social entrepreneurship combines social issues with business. The rewards are not the only thing on the minds of those who work in social enterprises. A different metric for success is how a business alters the world. Contrarily, in social philanthropies, everyone wins; the key objective is the social or ecological change brought about as a result of achieving that benefit.
- It is a framework that combines the notion of a business with the principles of a charitable nonprofit.
- It promotes the success of commercial endeavors, and all investment is directed toward achieving social and environmental goals.
- Social entrepreneurs are change-makers who use novel ideas to create substantial change.
- They develop effective solutions by figuring out the problems.
- Social entrepreneurship is a growing trend, alongside ESG (Environmental, Social, and Governance) and socially responsible investing (SRI).
- programs that promote education, offer banking services in underserved areas, and assist kids who have lost both parents to an epidemic disease.
Why are social entrepreneurs important?
The benefits that their initiatives will provide are something social entrepreneurs consider. They pursue social and environmental goals by using profits. As a result, they produce higher returns on social investment than traditional businesses.
Social impact: The social enterprise assists locals in marketing their goods locally and abroad. They use the proceeds from the sale to reinvest in the community in addition to paying locals. For instance, it might involve constructing educational and medical facilities both locally and elsewhere.
Many social enterprises contribute to environmental preservation. There are numerous models available. They manage a company that processes plastic waste, for instance.
Economic impact: Through the jobs and income it generates, social entrepreneurship, for instance, has an effect on the economy.
- Some social businesses enlist locals to work on their manufacturing processes. They then assist in its sale, returning the proceeds to the neighborhood.
What is the Significance of Social Entrepreneurs?
- Focus on Social Problems: Social problems are the main area of interest for social entrepreneurs. In order to create social arrangements in response to social issues, they first mobilize the available resources.
- Change Agent in Social Sector: They serve as social change agents as well as powerful catalysts in society.
- Bring the Changes: They adopt the goal of generating and maintaining social value, actively seeking out and seizing on new opportunities, and engaging in a continuous process of innovation, adaptation, and learning.
- Improve People’s Lives: These extraordinary individuals (Entrepreneurs) come up with brilliant ideas and against all odds succeed in creating new products and services that dramatically improve people's lives.
- Help in Achieving Inclusive Society: At the local level, they are also essential to the inclusive recovery and community reconstruction.
How can Social Entrepreneurs Contribute to India's Growth Story?
- No more Not for Profit:
- The development sector in India has undergone a rapid transformation, with the emergence of social enterprises that are wholly for-profit businesses and are no longer limited to "no-profit" or "low-profit" ventures.
- Without the aid of donations or grants, these for-profit social enterprises can sustain their operations.
- Social Impact Investing:
- The nation's social entrepreneurs are being supported, praised, and nurtured for being able to meet India's most difficult developmental requirements.
- The Impact Investors Council (IIC) reports that more than USD 9 billion has been invested in over 600 impact enterprises in India that have a positive impact on 500 million people's lives.
- The leading national trade group for impact investors in India is called Impact Investors Council (IIC).
- Its goal is to mobilize private capital to close the nation's social investment gap while creating a new asset class for impact investments.
- Deepening Social Innovation Movement:
- The development of India is being aided by the fundamental innovators and creative problem-solvers that are social entrepreneurs today.
- Their propensity for innovation has been further aided by the government's extensive use of technology and quick digitalization initiatives.
- Support of Government:
- The announcement and upcoming launch of the Social Stock Exchange, along with government support for startups, have created a more favorable environment for social entrepreneurship in India.
- The Securities and Exchange Board of India recently released the framework for a Social Stock Exchange, which will enable social entrepreneurs to raise more money and significantly broaden their impact and audience.
- Sustainability and a Multi-Dimensional Approach:
- The business models of social entrepreneurs have always focused on the sustainability framework.
- Furthermore, a multifaceted strategy must be used to close the socioeconomic gaps that exist in society.
- For instance, poverty has cultural, social, psychological, and emotional components in addition to its lack of financial resources. These aspects manifest as prejudice, exclusion, insecurity, vulnerability, helplessness, and rejection.
- Models of social entrepreneurship offer customization for every issue, addressing every aspect of a problem.
- These social cause enthusiasts can be trusted to take on more responsibility and be given a sizable portion of the economy in the Amrit Kaal (the 25-year period from 2047). They are motivated by a purpose, vision, value, and ethos to have a significant socioeconomic impact.
- Through their annual Social Entrepreneur of the Year (SEOY) India Award, the Schwab Foundation for Social Entrepreneurship, a sister organization of the World Economic Forum, and the Jubilant Bhartia Foundation have fostered social entrepreneurship in India for more than ten years.