Here’s something you should know:
India ranks 34th in general public understanding what social entrepreneurs do
This is as per a poll conducted by Thomas Reuters, Made For Good and UnLtd.
Popular view on social entrepreneurship in India equates it with social work, philanthropy or working for a noble cause. The degree of lack of awareness on what social startups do is prevalent among policy makers, govt institutions, banks, media and even among many B-school students. This lack of popular understanding causes an impediment in the growth of social entrepreneurship ecosystem in the country. Simply put, this means banks won’t lend to social startups, talented professionals won’t join them and govt departments won’t give special concessions to them.
This lack of awareness often causes social enterprises to be neglected when they are looking to raise capital through debt funding and investments. In order to create awareness about the work done by social enterprises, especially among banks and other financial institutions, it is important to formally differentiate between commercial and social start-ups – their objectives, impact, and needs.- British Council:The state of social enterprise in India
Some Reasons Why People May Not Be Aware Of Social Entrepreneurship
Complex nature of business
I believe it is very important to make a distinction between the nature of work and the objectives of a social enterprise and a commercial venture. A social enterprise does not begin by setting up computers in a hostel room. It often begins its journey in the field around a social problem. It possess a unique mindset of creating sustained social impact while making profits. This often entails difficult yet innovative choices towards operating its business. As compared to a commercial venture, a social enterprise measures its performance on people, planet and profit, often recognized as triple bottom line.
Social enterprises are inherently complex and many in the govt and financial system fail to adequately understand them. Further, an entity fusing social good objectives with profit often sounds like a contradiction to several people thus raising their suspicions towards social enterprises.
Lack of success stories
Being a poster boy of success not only attracts spotlight on the organization but also on the industry sector to which it belongs. The e-commerce industry in India to a large degree owes its popularity to stalwarts like Flipkart and Amazon. Ola and Uber are the mascots of online taxi industry.
Presently there are no success stories in the social impact sector that can catch popular fascination. In my earlier article Social Enterprises Should Not Dream To Be Unicorns! I have argued that given the the nature and philosophy of a social enterprise, it is practically difficult for it to attain the status of a ‘unicorn’. This does not mean there are no success stories or cannot be success stories. It simply means social enterprises are not meant to be stories of meteoric rise or poster boys of mind-boggling valuations for the venture capitalists. Impact is a game of patience.
Poor attraction for talent
When the IT industry flourished in India it attracted hordes of talented young professionals. A large number of students passing out of college wanted to work in IT and saw it as a satisfying career path. This made IT industry immensely popular as the preferred choice for employment.
India social entrepreneurs also find it difficult to attract qualified staff, who often view working for a social enterprise as more risky and less well-paying compared to traditional organizations. – Social Entrepreneurship is gaining momentum in India
Most social entrepreneurs are high quality talent themselves. However beyond the immediate founding team there is a dearth of good quality professionals to drive impact operations on the ground. There are virtually no social enterprises hiring young professionals from campuses and thus many are simply not aware of employment choices in social impact sector. Edtech and fintech sectors attract talent. However beyond them sectors like Water, Hygiene and Sanitation (WASH) and waste management struggle to find talent.
General awareness about social entrepreneurship is very poor in India. Complex nature of business, lack of success stories and inability to attract talent are some of the main reasons for this. However conditions are favourable for social entrepreneurs to start and grow.