Poverty essentially means insufficiency of basic necessities that denies the poor with opportunities to live a dignified normal life. Poverty is often seen through a complex lens, ignoring the most obvious reason for its existence. Lack of income.
As Aneel Karnani, Associate Professor of Strategy at the Stephen M. Ross School of Business, University of Michigan rightly says,
“Widespread poverty is an urgent challenge for the world. The starting point for addressing this challenge is the simple and obvious observation that the primary problem of the poor is that they have a low-income. The best way to alleviate poverty is to increase the income of the poor by providing productive employment. It is necessary to view the poor as producers and emphasize buying from them. Many of the current approaches to poverty alleviation miss this simple point. To escape from poverty, the poor need productive jobs that lead to higher income”.
The income distribution pyramid by Branko Milanovic puts 77% of the world’s population at the bottom of the pyramid with maximum wealth lying in the hands of the top 2%. The best way to tackle this problem is by raising the basic incomes of those at the bottom so that the income gap between the top and bottom narrows.
”I passionately believe that everyone deserves the chance to earn a living and create a life of dignity and self-reliance” – Kate Cochran, CEO, Upaya Social Ventures
Started in 2011 in the US, Upaya Social Ventures works with a vision to create employment opportunities for the BoP by supporting entrepreneurs, who seek to engage the community through sustainable businesses. We caught up with Upaya Accelerator Program Manager, Anu Jayaraman to understand the philosophy of Upaya.
Upaya’s goal is to create jobs for the poorest communities. They invest in for-profit social enterprises who scale up their job creation model in focal sectors like agriculture, agro-processing, skills and labour-intensive manufacturing. With 12 successful investments made so far, Upaya recently started their accelerator program (launched in 2017).
Lack of Gainful Opportunities and Skill Gap
In our chat with Anu, she spoke about how Upaya’s impact model originates from the current BoP employment landscape in India. Although the government is working towards increasing employment opportunities, jobs are not growing as fast as we would like them to grow. Unemployment and underemployment are both grave problems crippling growth and development at the BoP.
“Lack of gainful opportunities and the reach of these jobs is the current lacuna that needs to bridged.”
There are plenty of initiatives being taken up by the government to solve this problem but that is not enough. Private investments also have to go hand-in-hand and supplement the efforts of the government. Education and skills gap is one of the primary reasons for lack of employability. Secondly, the education system is designed in such a way that the workforce is not actually skilled for the job at hand.
“Skill-based and employability training needs to be focused on to bring the youth from the BoP up to speed with the know-how of the job basically making them fit for the jobs that they are aspiring to do.”
To address this gap, Upaya also focuses on companies that specialise in imparting skills and skill-based training to the BoP, making them job-ready and employable. Providing a consistent source of income that is close to home is something that will accelerate the pace of development and individual growth at BoP level.
Upaya’s Accelerator Program
With an intention of making startups eligible for receiving investments, Upaya rolled out a 6-month accelerator program wherein startups looking for first stage funding were identified, provided with mentorship and an early-stage investment.
The startups were grouped into small Cohorts based on a common theme or idea that they shared. Upaya works on capacity building and giving guidance to the entrepreneurs to make them investment ready for the next round which is the Investor Showcase. The startups then pitched to investors at the Investor Showcase. Additionally, Upaya chose 2 startups to be eligible for an investment from Upaya.
Impact Measurement at Upaya
“At Upaya we take impact measurement very seriously as it is necessary for us to know if our target group has benefitted from the jobs that they have received.”
Upaya undertakes surveys on a regular basis to understand first hand from their community whether the jobs that they have received is giving them the benefit that they seek. The survey uses metrics like Progress out of Poverty Index or PPI along with others like ‘rise in income’, ‘rise in asset ownership’, ‘education level of the family’ etc. to understand the impact that their solutions have delivered.
In the blog series #economyforall, we speak to and feature views and opinions of entrepreneurs, investors, academicians and influencers on inequality in India and can social entrepreneurship address it. Pulling people at the bottom of the pyramid out of poverty means making productive job and livelihood opportunities available to them. Upaya is playing a role of a catalyst by investing in social entrepreneurs who focus on this through their accelerator program. Here we chat with them.