New & promising entrepreneurs are building social enterprises
Feb 09 2014
of its citizens driven by new ideas and innovations across globe to think and make things bigger and better. However, there are roadblocks that hold back aspiring business minds and ideas.
Q. How does Sankalp forum help to improve entrepreneurship in India?
Sankalp Forum is a collaborative initiative that was born out of Intellecap’s desire to catalyse capital into impact enterprises. Through the forum we work with social enterprises in developing markets like India and Africa and help create a strong support ecosystem. We identify, support and showcase high-impact social enterprises and catalyse investments and resources into them by bringing all the key stakeholders — investors, funders, corporations and development practitioners together to help solve developmental challenges.
In our work with social start-ups in India, Asia and now Africa, we have seen that entrepreneurship is driving change. What is now needed is an amplification that takes powerful businesses to scale. For this, we need the various stakeholders I just mentioned, to pool the best of their intentions, capital and resources to help entrepreneurs who are out there to solve critical challenges faced. How can large corporate, investors, donors, policy-makers, media, NGOs and civil society come together to enable entrepreneurs? Put another way, we are trying to achieve ‘economies of scale’ in the effort to enable entrepreneurship. This of course, is only a means to an end. The end itself is about reducing vulnerabilities and creating access to a higher quality of living at the base of the pyramid.
Does Sankalp target entrepreneurs form tier II and III cities? What are the bottlenecks for entrepreneurs in such cities?
Indeed. In fact, in our recently concluded call for enterprise nominations through Sankalp Awards, we found that 60 per cent of the enterprises focus on both urban and rural markets. Nearly per cent of the enterprises that applied to Sankalp Awards this year, are headquartered in a Tier II and III cities. In the past six months, we have been in more than 10 smaller cities and towns of India and every time we have found new and promising entrepreneurs that are building their social enterprises.
The key bottlenecks that we see for entrepreneurs beyond the metros are the lack of a support ecosystem. Speak to an entrepreneur, and you’ll hear a few (or more!) similar challenges. To name a few, there is limited access to finance, information asymmetry about facilities that are available, and a globally diffused enabler ecosystem. For example, impact investment dialogues are led in the Global North, but the impact investing actually happens in the developing countries, the Global South, if you will. Large corporations are looking at sustainable sourcing globally, and the artisans in are in remote, disconnected pockets of the planet. And, everyday innovations are being led by sharp jugaadu entrepreneurs that can change the world, if only the world knew about them!
Even the business clubs and networks working in these cities are more focussed on traders and merchants, and often do not provide the knowledge, resources or connections that these entrepreneurs seek. The other challenge is that we often find entrepreneurs grappling with is the difficulty in finding and retaining talented professionals to work with them. But I must add that this situation is gradually changing. We are seeing some really vibrant entrepreneurship — focused activities emerging now in places like Patna, Ranchi, Dharmashala, Jaipur and others.
People in the industry say that this is a great time to be a social entrepreneur. What factors support the statement?
It’s very true, the stigma with being an entrepreneur is no longer as strong as it used to be till a few years ago. In fact, to some extent being a social entrepreneur is even considered “cool” now. There is a greater understanding that people take entrepreneurship out of choice and not because they cannot find a job.
In my view, this has happened due to three key factors. The first is the emergence of a cadre of successful social entrepreneurs who have tackled a key social problem while making their first million and creating thousands of jobs - think William Bissell, Vikram Akula, Ashwin Naik, Sumita Ghose, the list will go on and on. The second factor is the awareness levels are much higher than ever before — global platforms like the World Economic Forum, the G20, and G8 are all talking about impact investing and social entrepreneurship, the media is sitting up and taking notice. Social enterprises and entrepreneurs routinely find themselves featured on national television, newspapers and magazines. The third factor is the availability of an increasing quantum of capital that is keen to support social entrepreneurship. From just a few niche investors and funders a few years ago, the capital needed to support this space now originates from angel investors, philanthropic foundations, donors, government and even wealth managers.
The trend of startups has recently taken a pace in India. What factors do you attribute to it?
You are absolutely right, and this trend is exciting, especially in a general macroeconomic environment of gloom and doom. India has clearly had no dearth of entrepreneurs. However, what we are seeing now is the emergence of a cadre of young, risk-taking entrepreneur who is willing to test the traditional boundaries of business and capital.
I attribute this to a number of factors. The cost of starting up is much lower than what it ever was. In a climate of slow economic growth, there are a growing number of young professionals not happy with the growth options that their current jobs offer. While there is no guaranteed success, the likelihood of success and exponential growth is huge, if they plan their moves well.
The support ecosystem, as I pointed earlier, is also getting more robust. Seasoned professionals, senior bankers, lawyers and businessmen are willingly taking up the role of mentor for emerging start-ups across the nation, and the first generation entrepreneur is not letting go of this opportunity. The number of angel investors is growing, as is the availability of innovative financing for the new start-up. Also, the availability of affordable talent through an ever-expanding pool of volunteers, fellows, interns and mid-career professionals, often from around the globe, is another key factor working in favour of the start-up.