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India Paves the Way for Social Entrepreneurship

Tuesday, May 28, 2013

04:15 pm - 05:30 pm

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By Riva Gold, M.A. Candidate, Department of Communications at Stanford University

“The best minds of the world are solving problems of the rich,” says Sam Pitroda, Chairman of India’s National Innovation Council. In India, he says, “we have the largest number of poor in the world and we have a moral responsibility to address the problems of the world.”

India has become a global leader in social entrepreneurship, according to Sanjay Kadaveru, Founder of Action for India, (AFI) a social start-up enterprise.  “When you have so many problems at such a wide scale, processes are set in motion to try to form solutions,” he says.

Social entrepreneurship involves “applying the principles of entrepreneurship in order to cause a sustainable change that is for the good of society,” explains Professor Richard Dasher of the US-Asia Technology Management Center.

Despite the enormous demand for innovative solutions for the country’s 1.2 billion inhabitants, Kadaveru says entrepreneurs face a host of challenges when they to make new products and services to address India’s pressing needs. “There are a lot of people willing to walk away from lucrative careers in the private sector, but once they  have identified problems and solutions, they are stymied” by a lack of funding, a lack of access to the right technology and constraining government regulations.

“We realize the existing models are expensive and difficult to scale,” says Pitroda. “We need to focus on affordability, scalability and sustainability.” Technology is going to play an important role developing these sectors. The goal, ultimately, is to democratize information and help locals empower themselves.

Kadaveru and his colleagues work to support this kind of social entrepreneurship through AFI, which creates a network of hubs for social innovation through its offices in Delhi and Silicon Valley. The group works with both for-profit and non-profit companies to help them with funding, technology, partnerships and mentor in order to scale quickly.

AFI projects focus on five key sectors:  education, healthcare, energy, livelihoods and agriculture. One of its most successful companies is Digital Green, a company that leverages video technology to assimilate best practices for farmers across India.  So far, the tools have reached 119,345 agricultural workers.

Another company they’ve worked with is called babjob, which uses web, mobile and text applications for informal job markets.

Radhika Shah, fellow member of Action for India, says she’s drawn to the group for its large impact. “This is a meta-level system that helps so many social entrepreneurs scale,” she says. Shah looks for partners in Silicon Valley to fund and mentor this kind of social enterprise.

Aside from AFI, the Indian government can be a key partner for these types of initiatives. Kadaveru says that while it’s not necessary to take government funding, in the social sector “one cannot afford to ignore the government, because the government is such a powerful distribution channel for your products or services.” Without at least a government partnership, he says, it can be very difficult to achieve significant scale.

And while social ventures are not known for their large profit margins, that doesn’t mean they should plan to rely on donations. Profits and funding might not come from venture capital, says Pitrodo, but these ventures do need to have a business model with some profit to feed back into them, or they won’t be sustainable.

Ultimately, “what is happening in India is not relevant for India alone,” Kadaveru says. “Some of these ideas–  frugal innovation, developing products at a fraction of the cost–  are relevant not just to India but to Latin America, Africa, parts of Asia.”

Can social ventures be profitable? Should they? And how can Silicon Valley best leverage its talent to support Indian social initiatives? Share your thoughts with us in the space below.

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