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Top1. Introduction
India is one of the emerging economies in the twenty-first century and is witnessing rapid progress in different sectors. Accompanying this progress, the growth we have witnessed is not inclusive. The country still faces major socioeconomic challenges. Further, India is still considered as the 3rd largest by purchasing power parity (PPP) and the 6th largest by nominal GDP. Yet, around 21.9% of the population in India lives below the poverty line (Oberoi & Halsall, 2019). On the other hand, it has been witnessed that the unemployment in India, has increased marginally between the years 2017 and 2018, which indicates a stagnation in the job creation as presented in the UN Labor Report. Thus, social enterprises have come into play and taking charge of the present-day condition. India thus in the recent few years has seen a rise of a conventionally evolved but a modern day managed professional sector – “Social enterprises” (SE’s).
Social entrepreneurship is thus mentioned as an innovative model of community problem resolving. Social enterprises, largely exist to address challenges posed by the environment and society (Santos 2012). Researchers and practitioners have often recognized SE’s as an extended hand to address varied issues like empowering women (Zhao & Wry, 2016), reducing unemployment (Pache & Santos, 2013), controlling poverty (Battilana & Dorado, 2010; Wu & Si, 2018) and addressing environmental issues (Jay, 2013). It is thus, this engaging role of SE’s that has encouraged them to thrive around the world, especially in the economies where these problems are further noticeable (Zahra et al., 2014).
The following figure represents the Social Enterprise Ecosystem in the India context. It highlights upon some of the major facts like the numbers of SE’s, their types, distribution of SE’s by sector, the existing legal framework in India and mentions one of the very critical issue of scaling in SE’s.
Figure 1. An Ecosystem of Social Enterprise in India (Author’s own compilation of work from various reports)
While social enterprises tend to go for a bottom-up approach, the future of their business also depends on their ability to scale. Also, SE’s in comparison to other organisations, do not have the same capability of harnessing financial incentives. Thus, getting funding in the form of various grants, governmental or any other institutions is one of the biggest obstructions for SE’s, as for the amount invested, there is always a high degree of risk and the gestation period being, way too long. Another reason attributed to the failure of start-ups including SE’s is lack of unique business models or new technologies.
A social enterprise not only has a social impact but expects a financial return too. This business model is popular in the West and is slowly catching in India. Nirmala Sitharaman, India’s present finance minister urged for the conception of a “social stock exchange”, which would enable and ease the process, for the prospective ethical investors to buy stakes in welfare organisations, social enterprises and volunteer groups. This plan for a social stock exchange will emphasise on sustainability and social impact in business. Thus, if implemented, it would mean the government would start measuring the social and environmental impact of SEs. The government is committed to support social enterprises in capacity-building by investing through a new fund called India Inclusive Innovation Fund (IIIF) in areas such as healthcare, water, energy, urban infrastructure and transportation.
The review of literature and business practice has enumerated a wide range of illustrations of mechanisms and solutions that can contribute to capacity building in social enterprises. This study has a literature review spanning the time period of (2010-2019). It then, elaborates upon the case of PRADAN- an award-winning social enterprise using the suggestive indicators from literature and a qualitative analysis. Further, in this study, we investigate the sustainability and scalability of PRADAN. The aim of the study is to understand the success factors of PRADAN that can be replicated in the present ecosystem of social enterprises.