Building a better future: the new phase of social entrepreneurship in India

India’s growth story over the last two decades is now well known and acknowledged. Despite global challenges, economic organisations have predicted India to grow at over 6.9 per cent in the coming financial year. Over the last decade, the country’s growth story has been fuelled by entrepreneurship and the startup sector. We have over 77,000 registered startups and with 108 unicorns are only behind the US and China.

However, India continues to lag in several social and development metrics, despite making concerted efforts towards alleviating issues such as poverty, inequality, and lack of access to basic services.

The country ranked 132 out of 191 countries and territories on the 2021/22 Human Development Index. While the number of poor people in India dropped by about 415 million over the last 15 years, the country still has the highest number of poor people and children worldwide, according to the Global Multidimensional Poverty Index. These issues are currently acting as headwinds for the nation in realising its goals of becoming a $5 trillion economy by 2025-26 and $7 trillion by 2030.

While entrepreneurship is essential to continue India’s growth story, its traditional and “single-variable optimisation” nature is not enough to solve India’s complex challenges.

This is where social entrepreneurship comes into play. Popularised by people like Bill Drayton, the founder of Ashoka India, the term social entrepreneur, refers to an individual who applies the tools of traditional entrepreneurship – risk taking, customer-centric innovation, resource mobilisation and advocacy – to address issues of inequality, poverty, and climate change.

Social entrepreneurship is not new. Forty years ago, Mohammed Yunus pioneered micro-finance in Bangladesh and later won the Nobel Peace Prize for it in 2006. Aravind Eye Care, a unique hybrid (for profit and not-for-profit) eye care model has been scaling up its work since the 80s.

However, social entrepreneurship in India was limited to either the non-profit sector or a few for-profit sectors like microfinance and healthcare for a long time. In the recent past, three significant trends have opened this sector making it mainstream to foster the growth of sustainable development practices.

The first trend is attributed to various breakthroughs in technology, both in software and hardware, that have enabled social entrepreneurs to innovate and adapt new models of thinking. The reduction in costs of mobile technologies has led to the democratisation of knowledge and markets available to the poorest.

DeHaat, a startup, last valued at $700M, provides access to knowledge and markets to millions of farmers across India today. Interestingly, DeHaat’s origins were in the non-profit social enterprise world almost 15 years ago before technology gave it the leverage to scale up. Technology breakthroughs have now made the terms climate-tech, health-tech and agri-tech commonplace with many enterprises working at their intersection.

Similarly, the breakthroughs in AI and materials research have unlocked the potential to solve problems that seemed unsolvable in the past. Enterprises like Karkinos Healthcare, Wadhwani AI, NotPla, and Phool are innovating to apply the breakthroughs in AI to the biggest problems of our country like healthcare, plastic and waste management.

The second trend is the availability of different forms of capital. In the past, investments in social entrepreneurship were limited to philanthropy. Today, impact investing (venture capitalists interested in both business and impact metrics) has grown as a significant sector and has attracted mainstream investors. In fact, according to the Impact Investors Council, impact enterprises in India mobilised over $6.8 billion in India in 2021, with climate tech at the forefront. Many companies are investing in social enterprises, either through direct investment or through corporate social responsibility (CSR) initiatives.

Additionally, several prestigious grants and prizes are providing funds to social entrepreneurs in India. The Elevate Prize, Infosys Prize, The/Nudge Prize, and the Earthshot Prize, are some of the prestigious ones, with the latter being launched by The Royal Foundation and Prince William to identify and reward evidence-based solutions to the biggest environmental problems faced by our planet.

The government is not far behind and is emphasising the need to build public-private partnerships to address India's developmental challenges. India's G20 presidency is showcasing its capabilities to the world, including the work of its thriving, and committed social sector. India has mentioned the need to move beyond regular investments and adopt innovative financing methods for cumulative and accelerated growth.

The final, and most important trend is the rise in popularity of the sector which has resulted in an influx of young talent into the sector. Driven by an increased awareness of the complexity of the challenges facing our country, more and more people are leaving traditional corporate jobs to dedicate their creativity to social and environmental issues.

Even Shark Tank's latest season had several for-profit and even a few not-for-profit social enterprises participating and receiving funding. The transition to the social enterprise sector, once considered daunting, has been made easy by the rise of fellowships and transition programs for freshers and experienced professionals.

Social entrepreneurship not only has the potential to fuel India’s continued growth story but also make it equitable, resilient, and sustainable. Continued investments in technology breakthroughs, capital and talent in the sector will help us reverse the trends of inequality and create a more sustainable and equitable society.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.