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Is India Really a Hotbed for Social Enterprise? Is India Really a Hotbed for Social Enterprise?
Business

Is India Really a Hotbed for Social Enterprise?

by Beyond Profit

October 27, 2010


If you know anything at all about social enterprise, you are probably familiar with the fact that many of the case studies cited as successful are Indian in origin. Case in point: Aravind Eyecare, Jaipur Rugs, Barefoot College, d.Light. It makes you wonder: Is India better at producing social entrepreneurs than other countries? Is there something in the water? And if India really has cornered the social enterprise market, how did they do it?

First, let’s look at what we know. India is massive. It’s bursting at the seams with people, and because one out of every six people on the planet is an Indian, we are statistically more likely to stumble upon Indians anywhere—and some of those people are bound to be social entrepreneurs, right? Of course, a big pile of people does not explain why social enterprises often thrive in India, and the policy environment certainly doesn’t help: There are no freebies for social enterprise, no special legal structures (like the L3C here in the United States or the CiC in the U.K.), and few policies that help enterprises get funding. In fact, some might say that Indian social enterprises have succeeded in spite of policy, not because of it.

What about funding? Most Indian social entrepreneurs would tell you that they have just as much trouble as the next guy. There are only a handful of “social” or “social/commercial” funds in India, and while there is a frenzy of interest in India from foreign investors, many of them ride on the coattails of domestic funds, investing only after a trusted Indian social investor has made the first move.

So, what makes India different? 

India has had a long, rich love affair with nonprofit organizations. A recent survey commissioned by the Indian government found that there is one non-governmental organization for every 400 people—which means there are about 3.3 million NGOs. Regardless of how great each NGO's impact is, the sheer number of them is symbolic of a culture that favors trying to help those in need. However, many have seen that these NGOs are not always accountable, transparent, or sustainable. Stemming from this tryst with NGOs is a graduation to sustainable social enterprise.

Second, with over 40 percent of people on the subcontinent living on less than U.S. $1.25 a day, there is plenty of need for social enterprise. With such a large population in need, there’s plenty of opportunity to test things out. Because of a lack of regulation and oversight, it is possible to get in there, run pilots, and figure out what works.

Third, the currency of language cannot be underestimated. One of India’s national languages is English, and many people, rich and poor, speak it. Even if social entrepreneurs in Romania or Ecuador or Côte d’Ivoire have great ideas, they may be held back in their ability to spread those ideas, enter international business competitions, or get funding from English-speaking Western countries.

Fourth, never underestimate the power of the Indian family. Indian families are tight, complex webs of people who you know and love, and people who you don’t know, but who you call “cousin” and “uncle” even if they have absolutely no relation to you. These networks—close and extended—translate into resources for social entrepreneurs. They are the building blocks of most start-up businesses, and these enable enterprises that would not otherwise have a chance, to get off the ground.    

Lastly, and perhaps most important, there is a certain ethos in India which makes it possible for social enterprise to thrive. You can’t manufacture this attitude; it is something that only comes from living and working in India. This attitude, a mix of confidence, perseverance, and “can’t-touch-this,” known as jugaad, is an Indian way of getting things done using any means, against the odds. This ethos gets social entrepreneurs, once they put their minds to something, to figure out how to make broken systems work, to close gaps in service delivery, and to change the status quo.    

So, combine a whole bunch of people who have an unstoppable attitude, an incredible combination of personal resources, a population in need, and a propensity towards helping others…and what do you get? A hotbed for social enterprise. What do you think?  Are you drinking the KoolAid?

Lindsay Clinton is the Editor of Beyond Profit, where a version of this piece has run.

Image (CC) by Flickr user Meanest Indian

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