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=== Social enterprises ===
=== Social enterprises ===
[[Social enterprise|Social enterprises]] address social issues related to education, health, and access to capital. Alvord, Brown, and Letts emphasize that social entrepreneurship manifests itself in three main ways: combining commercial enterprises with social impact, innovating strictly for social impact without attention paid to profit, and catalyzing social transformation beyond the initial problem.<ref name=":11" />
[[Social enterprise|Social enterprises]] address social issues


=== Impact investing ===
=== Impact investing ===

Revision as of 16:17, 13 November 2018

Social entrepreneurship in South Asia involves business activities that have a social benefit, often for people at the bottom of the pyramid.[1] It is an emerging area of entrepreneurship that is supported by both the public sector and the private sector.

Social entrepreneurship is capable of empowering groups that don't typically participate in the entrepreneurial market. In South Asia, women entrepreneurs lead 20% of social enterprises.[1] Women-led businesses provide economic empowerment especially in cultural contexts where women are not the main breadwinners.[2][3]

India, Pakistan, and Bangladesh all of which have seen a rise in social businesses in the last few decades.[1]

History

The most successful social entrepreneurial ventures in South Asia have historically worked on initiatives that alleviate poverty, focusing on increasing access to capital.[4] These initiatives have been led by both governments and private enterprises.[1]

In 1969, the Indian government nationalized its banks, and began a campaign to expand bank access across the country.[5] Between 1969 and 1990, the program created 30,000 banks in rural locations that were previously unbanked. While successful in addressing rural poverty with extremely high returns to capital, which is well-expected in low-income countries,[6] urban poor left out entirely.[5] The keep this program going, the Indian government invested significant capital, but during the program's tenure there was no measurement of program effectiveness, which remained an issue to be addressed.[5]

One of the most well-known social entrepreneurs from South Asia, Muhammad Yunus, is a native of Bangladesh. He founded the Grameen Bank in 1976 with the mindset that lending money to poor people could build the credit they need to work their way out of poverty while being profitable.[7] For his work in microcredit, Yunus was awarded the Noble Peace Prize for "efforts to create economic and social development from below". Due to the Grameen Bank's success, it has inspired a multitude of individuals to also seek out ways to improve human wellbeing through business, especially young entrepreneurs.[4][8]

Social entrepreneurship is still a nascent field in South Asia, as most of the ventures have only been created in the past five to six years.[9][10]

Types of Social Entrepreneurship

Social entrepreneurs in South Asia are often focused on objectives that build capabilities. Through social entrepreneurship, Shahrazad Hadad states that individuals often seek the following five aims: conceive new markets for social necessities, establish new jobs and social equity, mobilize resources for social good, conceive social capital, and aid beneficiaries and customers.[11]

Social entrepreneurs can generate social impact through social enterprises and impact investing.

Social enterprises

Social enterprises address social issues related to education, health, and access to capital. Alvord, Brown, and Letts emphasize that social entrepreneurship manifests itself in three main ways: combining commercial enterprises with social impact, innovating strictly for social impact without attention paid to profit, and catalyzing social transformation beyond the initial problem.[4]

Impact investing

Impact investing currently serves target their investments in South Asia in two main ways: intention of enterprise to create impact and potential to do so.[12] Impact investing often addresses enterprises that are currently on a small-scale, instead of large infrastructure projects addressed by other forms of aid.[12]

Demographics

Social entrepreneurs

People become interested in social entrepreneurship often because they wish to address problems that both governments and markets have failed.[13] In analyzing the reasons why certain regions and countries engage in social entrepreneurship, Johanna Mair found that it often highly depends on the region. In South Asia, she states, social entrepreneurship is shaped by the political problems that these countries have faced since their independence from Britain.[14] Most countries are currently undergoing rapid development, with a significant gap widening between rich and poor individuals. So, there has been a rise in people-centered development, which encourages citizens to be active in addressing issues in their communities.[8] In India, social entrepreneurs often focus on social inequality, as formal legislation does not recognize discrimination although the caste systemis quite prominent.[14] People of low-castes are often the base of the bottom of the pyramid. In Bangladesh, social businesses like the Grameen Bank and Building Resources Across Communities (BRAC) address issues related to government inefficiencies, which often ignore rural poor.[14] In Pakistan, natural disasters like earthquakes have also led to the creation of organizations that operate where relief efforts lack.[14]

Some key groups engaged in social entrepreneurship include women and young people.[1]

Women

Women represent a growing sector of social entrepreneurs. Gailey and Bhatt Datta write that women are often driven to entrepreneurship in order to feel empowered in their own circumstances because they want:

"(1) Access to resources, including preconditions;

(2) agency, including process; and

(3) achievements, including outcomes."[15]

In most countries, women become entrepreneurs more in the informal economy than the formal economy. In fact, the informal sector is often the primary source of employment for women in developing countries[16] Relatively few of these women employ paid workers, and often act as traders and producers.[16] This leads to smaller-scale operations, but self-employed women often make more money than they would if they were a wage worker or a subcontracted worker.

Young people

The majority of social entrepreneurs are under the age of 35.[17][9] Despite high levels of representation, their reasons engagement in social entrepreneurship has been under-explored especially in developing countries. Dash and Kaur suggest that young people though find themselves more interested in working for themselves which is why they launch ventures.[18]

Target populations

Social entrepreneurs in South Asia often address needs of those at the bottom of the pyramid. Poor people often aren't able to meet their basic needs, like education and health, because for three reasons: access, quality, and affordability.[13] When targeting the poor, affordability is critical often because the poorest people have extremely low levels of capital. 469 million people in India currently earn less than $1.25 a day while 850 million people earn less than $2 a day.[19] While they don't have high purchasing power individually, collectively they represent an aggregated purchasing power of $1 trillion.[19] Research has even been done to show poor people can mobilize capital to purchase goods only if they are made at a price point that is affordable to them.[20]

The vast majority of social enterprises benefit the local community, at 90% in Bangladesh and 80% in Pakistan.[17][9] Only a minority work with large numbers of beneficiaries, with 2% of enterprises in India having helped a total of 60 million people.[10] The largest beneficiary groups are often women and youth.[10]

Policy

There is not one designation across countries in South Asia for social enterprises. In India, the two most common legal statuses for social businesses are private limited companies and non-governmental organizations (NGOs).[10] In Bangladesh, sole proprietorship is the most common form of registration, often because it is the easiest type of business structure to start up especially for those with limited resources. Other common forms of legal structures include partnerships and societies.[9] In Pakistan, social businesses can be structured as either for-profits or non-profits, and are most commonly structured as for profit organizations. Still, 1 in 4 social enterprises in Pakistan have no registered legal status.[17]

Government support

Recently, countries have begun to grow organizations that support entrepreneurial efforts, including social innovation. Startup India, an initiative of the Government of India, is working to empower startups working in innovation and design and promote businesses to stay in India to do their work.[21] Still these initiatives remain too broad to support social entrepreneurs, whose models often don't fit into traditional systems.

Corporate Social Responsibility

Corporate social responsibility (CSR) is becoming far more important in the growth of social entrepreneurship, and has a great impact on the impact of social innovation. Companies often have the finances available to support local efforts and invest in the research needed to understand the need of the rural poor.[19] The Companies Act, 2013 in India requires companies that have a network of INR 500 crore, turnover of INR 1,000 crore, or a net profit of INR 5 crore to commit 2% of average net profits to pursue CSR policy.[22] It is the only country in the world to do so.[23]

Eligible CSR activities include:

  • Reducing child mortality
  • Environmental sustainability
  • Eradicating hunger
  • Promotion of education
  • Gender equity
  • Disaster relief.[23]

Companies can pursue CSR through the following four methods:

  1. Directly as the company
  2. Through a company's non-profit foundation
  3. Through a registered non-profit organization
  4. Collaborating with other companies.[23]

Capacity Building

Education and training

Ashoka: Innovators for the Public is one of the world's leading social impact training agencies, and was one of the first to begin investments in India.[24] William Drayton, Ashoka's founder, inspiration for his organization came from Ashoka the Great, a Maurya Emperor from the 3rd Century B.C.who left behind pillars known as the edicts of Ashoka which detailed much of his benevolent work on social good and welfare.[25] In these writing, he discusses a series of social programs that he implemented in order to ensure the wellbeing of his citizens, including bringing in essential medicines for his people and creating roadside facilities for travelers.[25] Ashoka's model is to first find those people are addressing big problems, then supply them with the funding and services they need to be successful. They focus on small investment and support in order to produce maximum gains to support visions.[24]

People have also worked to reduce barriers to female engagement in social entrepreneurship through implementing focused, women-only trainings. Women entrepreneurs often fail because there are not adequate training or advisory services. With women-only trainings, women can not only gain the skills they need to start their companies but also build a community that inspires them to keep working.[26]

Young people are often the largest target population for social entrepreneurship education. Ashoka India piloted the Youth Initiative, which aims to help Indian youth across the country to take on leadership roles in the civic sphere and realize social change.[24] They tackle two critical problems related to getting youth engaged in entrepreneurship: (1) young people are systematically undervalued and (2) young people need transformative experiences at young ages to empower them.[24]

Resources and support systems

For female social entrepreneurs, female-only cooperatives are often critical. Many have been formed in South Asia in recent years. Some of the most successful include the Self-Employed Women's Association, the Cooperative Development Foundation, and Lijjat.[3] Lijjat has been intensively studied for its work to provide self-employment opportunities for poor, urban women. This organization receives little governmental support, but is still able to have high profit margins and provides ownership opportunities to women involved in the program through profit sharing.[3] Such initiatives have helped women to earn profit in a way that is empowering and culturally sensitive. As one woman from Lijjat is quoted "I realized that from working here [Lijjat], I could earn an income to support my family. Also, since I would be working from home and with other women, my husband would not raise any objections".[3]

Challenges

Limited knowledge

Much of the discussion of social entrepreneurship and innovation has been from a Western lens, with only recent research focusing on other locales like South Asia. So, understanding of what works and doesn't work in South Asia is only beginning to be understood.

Social entrepreneurship at its core is more difficult than traditional entrepreneurship as social entrepreneurs must find where markets or institutions have failed.[27] This is significant as many South Asian countries lack strong democracies, and low government transparency often means that governments lack the capability to address social problems.[8] An social entrepreneurs motivations must also be beyond just making a profit.

Funding limitations

For many social entrepreneurs in South Asia, access to capital and maintaining that capital is the major barrier to growth.[10][9][17]

Engagement in social entrepreneurship is also highly impacted by social status. Hindu entrepreneurs are typically classified by caste, with higher castes being more likely to engage in entrepreneurship than lower castes. Almost 65% of entrepreneurs were from high castes while no people from the lowest castes were entrepreneurs.[28] This is because people from higher castes are more likely to have the resources to support their ventures.

Limitations by gender

Gender can also greatly restrict active participation in entrepreneurship. In both Bangladesh and Pakistan, social and cultural barriers limit women from starting their own ventures as this is an activity that is not regarded positive for women to participate in.[26][29] Rural women in South Asia often begin their businesses small, meaning that they need access to small funds in order to bolster their businesses.[30] While the informal economy is an important employer of women, women participating in the informal economy often receive far less recognition than their male counterparts even if they are working for social change.[3] Female entrepreneurs in South Asia also choose not to grow their businesses because they often choose to support their families.[29] Technology has also been incredibly important for driving social change, but women are more likely to not have access to vital technology. For example, women are 38% less likely to own a mobile phone than men.[31] This is especially limiting as many upcoming social innovations in India utilize information and communication technology.

Policy limitations

Currently, social enterprises in many countries in South Asia are categorized as NGOs, but this definition does not recognize businesses that have a social mission but make profit. This can often limit social enterprises as there are strict definitions of NGOs in India, specifically related to the movement of capital. If any money is received it is treated as a 'donation' and so cannot be used to make returns which makes investing limited and stalls social enterprise growth.[10] These limitations have led many social entrepreneurs to pursue a private limited structure.[10] For example, many microcredit enterprises have transitioned from non-profits to for-profit in order to pursue profit generation. This lack of legal structure in addition to equity investment regulations, restrictions on blended capital, and restrictive laws on foreign capital through acts like the Foreign Contribution Regulation Act, restrict the actions of social entrepreneurs.[32]

Social Entrepreneurship by Country

India

Ashoka's Fellows Program has led the way for many entrepreneurs to launch companies in India.[24] Gloria de Souza, the first Ashoka Fellow ever, introduced experiential and problem-solving education in the classroom. Her work now impacts 10 million children and the Indian government has adopted it into their schools.[33]

Multiple other initiatives that have pioneered social impact in India include the Honey Bee Network, SRISTI, which pioneered the Honey Bee Network, and Piramal Water.

Pakistan

The Hashoo Foundation is a leading social impact agency working to support Afghan refugees through skills training and income generation. The organization seeks to build the vocational skills that refugees need to be successful in their new lives. Their work also focuses on supporting women economically in order to improve their opportunities in a male dominated labor market.[34]

Bangladesh

Building Resources Across Communities (BRAC) is a leading organization in Bangladesh that works to create village groups that can solve local problems and focus on village development. Instead of just providing relief like international development agencies, BRAC focuses on building capabilities. The organization focuses on learning from the individuals they work with in order to benefit the organization as a whole.[4]

See also

References

  1. ^ a b c d e "Survey: social enterprise in BGD, GHA, IND & PAK | British Council". www.britishcouncil.org. Retrieved 2018-11-03.
  2. ^ Kantor, Paula. (2002). “Gender Microenterprise Success and Cultural Context: The Case of South Asia”. Entrepreneurship Theory and Practice. 26(4), pp 131-143.
  3. ^ a b c d e Bhatt Datta, Punita and Gailey, Robert (2012). “Empowering women through social entrepreneurship: case study of a women’s cooperative in India”. Entrepreneurship Theory and Practice, 36(3) pp. 569–587.
  4. ^ a b c d Alvord, Sarah, Brown, David, Letts, Christine. (2004). “Social Entrepreneurship and Societal Transformation”. Journal of Applied Behavioral Science, 40(3), pp 260-282.
  5. ^ a b c Burgess, Robin; Pande, Rohini (2005). "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment". The American Economic Review. 95 (3): 780–795.
  6. ^ Banerjee, Abhijit V.; Duflo, Esther (2005). "Growth Theory through the Lens of Development Economics". Handbook of Economic Growth. 1: 473–552.
  7. ^ Bayulgen, Oksan (2008). "Muhammad Yunus, Grameen Bank and the Nobel Peace Prize: What Political Science Can Contribute to and Learn from the Study of Microcredit". International Studies Review. 10 (3): 525–547.
  8. ^ a b c Institute, The Hope (2017), "Social Innovation in Asia:: Trends and Characteristics in China, Korea, India, Japan and Thailand", New Worlds from Below, Informal life politics and grassroots action in twenty-first-century Northeast Asia, vol. 9, ANU Press, pp. 249–274, ISBN 9781760460907, retrieved 2018-10-19
  9. ^ a b c d e British Council (2016). The State of Social Enterprise in Bangladesh.The British Council.
  10. ^ a b c d e f g British Council (2016). The State of Social Enterprise in India. The British Council.
  11. ^ Hadad, Shahrazad (2017-07-01). "Main research areas and methods in social entrepreneurship". Proceedings of the International Conference on Business Excellence. 11 (1): 893–903. doi:10.1515/picbe-2017-0095. ISSN 2558-9652.
  12. ^ a b Global Impact Investing Network (2015). "The Landscape for Impact Investing in South Asia". GINN.
  13. ^ a b Seelos, Christian; Mair, Johanna (2005). "Social entrepreneurship: Creating new business models to serve the poor". Business Horizons. 48 (3): 241–246. doi:10.1016/j.bushor.2004.11.006. ISSN 0007-6813.
  14. ^ a b c d Mair, Johanna (2010). "Social Entrepreneurship: Taking Stock and Looking Ahead". SSRN Electronic Journal. doi:10.2139/ssrn.1729642. ISSN 1556-5068.
  15. ^ Bhatt Datta, Punita and Gailey, Robert (2012). “Empowering women through social entrepreneurship: case study of a women’s cooperative in India”. Entrepreneurship Theory and Practice, 36(3) pp. 569–587.
  16. ^ a b Chen, Martha Alter (2001). "Women and Informality: A Global Picture, the Global Movement". SAIS Review. 21 (1): 71–82. doi:10.1353/sais.2001.0007. ISSN 1945-4724.
  17. ^ a b c d British Council (2016). The State of Social Enterprise in Pakistan.The British Council.
  18. ^ Dash, Manjusmita; Kaur, Kulveen (2012-01-17). "Youth Entrepreneurship as a Way of Boosting Indian Economic Competitiveness: A Study of Orissa". International Review of Management and Marketing. 2 (1): 10–21. ISSN 2146-4405.
  19. ^ a b c Tasavori, Misagh; Ghauri, Pervez N.; Zaefarian, Reza (2016-07-11). "Entering the base of the pyramid market in India". International Marketing Review. 33 (4): 555–579. doi:10.1108/imr-03-2014-0085. ISSN 0265-1335.
  20. ^ Viswanathan, M. & Sridharan, S. (2012), "Product Development for the BoP: Insights on Concept and Prototype Development from University‐Based Student Projects in India", Journal of Product Innovation Management, Vol. 29 No. 1, pp. 52-69.
  21. ^ "Home Page". www.startupindia.gov.in. Retrieved 2018-10-20.
  22. ^ "Ministry Of Corporate Affairs - Companies Act, 2013". www.mca.gov.in. Retrieved 2018-11-06.
  23. ^ a b c Anupam, Singh,; Priyanka, Verma, (2014-08-30). "From Philanthropy to Mandatory CSR: A Journey Towards Mandatory Corporate Social Responsibility in India". {{cite journal}}: Cite journal requires |journal= (help)CS1 maint: extra punctuation (link) CS1 maint: multiple names: authors list (link)
  24. ^ a b c d e Sen, Pritha. (2007). “Ashoka’s big idea: Transforming the world through social entrepreneurship”. Futures, 39(5), pp 534-553.
  25. ^ a b 1951-, Dhammika, Shravasti, (1993). The edicts of King Asoka : an English rendering. Aśoka, King of Magadha, active 259 B.C., Buddhist Publication Society. Kandy, Sri Lanka: Buddhist Publication Society. ISBN 9552401046. OCLC 34768399. {{cite book}}: |last= has numeric name (help)CS1 maint: extra punctuation (link) CS1 maint: multiple names: authors list (link)
  26. ^ a b Roomi, Muhammad. (2010). “Behind the veil: women-only entrepreneurship training in Pakistan”. International Journal of Gender and Entrepreneurship, 2(2), pp 150-172.
  27. ^ MILLER, TOYAH L.; GRIMES, MATTHEW G.; MCMULLEN, JEFFERY S.; VOGUS, TIMOTHY J. (2012). "VENTURING FOR OTHERS WITH HEART AND HEAD: HOW COMPASSION ENCOURAGES SOCIAL ENTREPRENEURSHIP". The Academy of Management Review. 37 (4): 616–640.
  28. ^ Nafziger, E. Wayne (1977). "Entrepreneurship, Social Mobility, and Income Redistribution in South India". The American Economic Review. 67 (1): 76–80.
  29. ^ a b De Vita, Luisa; Mari, Michela; Poggesi, Sara (2014). "Women entrepreneurs in and from developing countries: Evidences from the literature". European Management Journal. 32 (3): 451–460. doi:10.1016/j.emj.2013.07.009. ISSN 0263-2373.
  30. ^ Kantor, Paula (2002). "Gender, Microenterprise Success and Cultural Context: The Case of South Asia". Entrepreneurship Theory and Practice. 26 (4): 131–143. doi:10.1177/104225870202600408. ISSN 1042-2587.
  31. ^ Warnecke, Tonia (2017-04-03). "Social Innovation, Gender, and Technology: Bridging the Resource Gap". Journal of Economic Issues. 51 (2): 305–314. doi:10.1080/00213624.2017.1320508. ISSN 0021-3624.
  32. ^ GIZ (2012). Enablers for Change -A Market Landscape of the Indian Social Enterprise Ecosystem, September 2012, Prepared for GIZ by Ernst and Young Pvt. Ltd. https://www.giz.de/en/.../giz2012-enablers-for-change-india-en.pdf
  33. ^ Bornstein, David. (2007) How to Change the World: Social Entrepreneurs and the Power of New Ideas. Oxford: Oxford University Press.
  34. ^ Jabbar, Sinaria Abdel; Zaza, Haidar Ibrahim (2015-09-22). "Evaluating a vocational training programme for women refugees at the Zaatari camp in Jordan: women empowerment: a journey and not an output". International Journal of Adolescence and Youth. 21 (3): 304–319. doi:10.1080/02673843.2015.1077716. ISSN 0267-3843.
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